On Wednesday, the three major U.S. stock indices slumped more than 3.0%, the fear gauge VIX Index surged 20.8% to a 4-month high of 40.28.
However, precious metals didn't get a lift from increased safe-haven demand, as spot gold dived 1.6% and spot silver plunged 4.1%. In fact, they are recently more correlated to the strength of the U.S. dollar, where the ICE Dollar index climbed 0.5% a 1-week high of 93.43.
From a technical point of view, spot gold has weakened further as shown on the daily chart. It has now broken below a shorter-term rising trend line and returned to levels below both the 20-day and 50-day moving averages. The level at $1,925 might be considered as the nearest resistance, while the 1st and 2nd support are expected to be located at $1,848 and $1,815.
Source: Gain Capital, TradingView
On a daily chart, spot silver has resumed its bearish trend after Wednesday's decline. It has broken below a shorter-term bullish trend line, while the longer-term declining trend line is still valid. The level at $25.55 may be considered as the nearest resistance, while the 1st and 2nd support are expected to be located at $21.66 and $20.00.
Source: Gain Capital, TradingView
