The prices of gold are creeping higher as the dollar begins to weaken across the board.
Gold prices continued their recovery over the last 24 hours as they have since broken through the 1325 region and look higher. This was largely due to the weakness in the dollar that was seen across the board. But this move lower in the dollar should be taken with a pinch of salt due to the simple fact that yesterday, there were a lack of fundamentals and specific economic data in the markets and this led to some slow and low trading for much of the day and any movement under such conditions should be considered as something that is very likely to get reversed and on loose ground. But we had mentioned in our forecast yesterday that it was also likely that the dollar could face a period of uncertainty and pressure in the short term.
Gold Prices Buoyant
The onus is on the dollar to prove its strength for the next couple of months as the expectations from the market continues to increase. The Fed is expected to keep pace with the market expectations and hike the rates 3 or 4 times this year and for that, the economic data needs to be very strong at any point of time. This places each economic data under extra scrutiny and with the retail sales data and the inflation data from the US around the corner, it is natural for the investors and the traders to feel a bit jittery about the dollar and the gold bulls have made full use of it so far to push the prices higher.
The oil prices have also been chopping around the $60 region over the past couple of days but we really do not think that there is too much more downside to the oil prices as of now. On the other hand, this is a price region that gives comfort to the producers and the buyers and hence we are likely to see the too much upside as well,for the short and medium term as well.
Silver prices have also gained over the last 24 hours as they trade comfortably above the $16.5 region as of this writing and they are set to continue to the $17 region over the short term.