The dollar is gaining further ground now in European morning trade and among the bigger losers today is gold. The yellow metal is down 0.7% to just under $1,956 currently as it erases the advance from Friday. Gold is now threatening a steeper fall towards its 100-day moving average (red line) once again:
That level comes in at around $1,931 and will be a key technical support to watch alongside the 50.0 Fib retracement level at around $1,935.
With 10-year Treasury yields breaking higher, there might be scope for gold prices to correct further in the days/weeks ahead. However, as mentioned before, I’d still be one for dip buying in the bigger picture but you have to pick your fights.
Looking at precious metals, gold isn’t quite the biggest loser today as we are seeing silver get hammered down by over 2% to $23.13 at the moment:
The double top pattern just above $26 was already an ominous signal before the break of the neckline around $24.65 came about. After that, it has been rather one-way traffic with the only the declines last week being halted by the 100-day moving average (red line).
That level has now been broken and could set up a sharper drop in silver next.
This article was written by Justin Low at www.forexlive.com.
