Gold Begins to Make an Interesting Move

Gold finally seems to be making its move towards 1300 which we have been forecasting for the past couple of weeks. Gold seems to be benefiting from the doubts that continue to exist about whether the US Fed would indeed hike rates in December. Though the bullish Fed members continue to maintain that there would be a hike in December and the market is pricing in the hike during December, there still remains a doubt on whether the Fed would indeed make the move or whether it would choose the push the hike to later next year. This uncertainty over the rate hike and also the global risks surrounding the Brexit process and the state of the Chinese economy continue to support the gold price. The commodity broke through 1271 and continues to push upwards and sits at 1275 as of this writing and it looks good for more.

The next targets that we should be looking at would be 1285 and then on to 1303 where the situation would get very interesting. The investors and buyers would watch the price action at 1303 very closely to see if the move would continue upwards or whether this move is just a correction of the fall in the price through 1303 which was witnessed a couple of weeks back. Whatever may be the case, gold seems to be back in the spotlight with lot more buyers and sellers and investors watching its moves closely.

Oil prices dropped below $50 due to overall USD strength across the board and also due to the fact that private oil inventory data came out and it showed that there was a larger build up in the inventory than what was expected. This proved a dampener as unless the demand exceeds supply, there cannot be an increase in the oil prices and with the inventory becoming more, that possibility remains remote. Hence, we saw a quick drop in the oil prices yesterday and the prices continue to consolidate below 50 as we write this. The planned production cuts from the OPEC producers will continue to support the prices and as we approach the November meeting between the OPEC producers, we should be able to get more clarity on how the deal is progressing and as long as the deal holds, we should expect a further boost in the oil prices atleast in the near term.

Silver was helped by the general buoyancy in the commodity prices and especially the slow build in the gold prices and the weakening in the USD and it sits at the top of its range threatening a breakout through the top. This will hopefully help silver to join gold in the upmove, something which it has failed to do over the past few weeks as silver price continues to be depressed despite rising commodity prices.