Gold declined significantly today, and it’s declining again today despite yesterday’s small rebound.
It’s the interest-rate-decision day, and that’s precisely when gold and silver tend to rally based on uncertainty.
Perhaps the markets are sensing that they are going to mention risks associated with rising oil prices, which has obvious implications for the inflationary pressures.
Gold price just moved below the 38.2% Fibonacci retracement once again after just a tiny rebound from this level. It looks like gold could plunge any day – or hour – now.
Same with silver – nothing is preventing the white metal from further declines. It corrected slightly more than 38.2% of the decline, it verified the breakdown below the upper of the rising support lines, and it broke below the lower one (which was confirmed). Silver seems ready to decline more.
The key thing is that the crude oil shows no signs of stopping. Yes, the political statements, negotiations and all sorts of messages confused the markets and triggered wide price swings, but…
The Strait is pretty much closed, and the implications are just like they were – bullish for crude oil, bearish for the world economy in general, which in turn is bearish for stock markets and commodities (except oil, of course).
Finally, please check how significantly the mining stocks are falling now:
The 4% daily declines seem significant, but in my view they are still small compared with what’s coming.
It seems that the profits on our positions are going to increase much more before this is all over. I’ll keep my subscribers informed on when to take profits via regular and intraday Alerts.
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Thank you.
Sincerely,
Przemyslaw K. Radomski, CFA