Gold Prices Plummet as USD Index Breaks Out
Gold prices plummeted below $4,500 on Monday, marking a significant breakdown in its support line. This move has been predicted by Przemyslaw Radomski, CFA, who noted that a close below $4,500 would be the final nail in gold's temporary coffin. With gold trading near $4,426 as of now, it seems that this prediction has come to pass.
The decline in gold prices is not an isolated incident, as silver also fell by roughly twice the pace of gold. Radomski had warned earlier that silver's immediate-term outperformance was a sign that the market wants to move lower, and this morning's price action seems to validate his claim.
The US dollar index (USD Index) has been gaining strength, closing above its declining resistance line for three consecutive days. This breakout confirmation has led Radomski to believe that the decline seen in August is over, making it likely that the precious metals sector will also experience a downturn. The recent conflict between the US and Iran, which saw oil prices spike, further supports this notion.