Commodities Await Direction

Gold prices corrected a little bit over the last 24 hours but it was more of a move to the bottom of a tight range rather than a full fledged correction. The market is in a wait and watch mode as the US House gets ready to vote on the bill that will repeal Obamacare. The Trump team is trying its best to get as many on board the plan as possible and even late yesterday, it was not clear on whether they would be able to garner the required support to ensure the safe passage of the bill. But, if reports are to be believed, they are now ready to push through on the voting for the new Bill today irrespective of whether they have enough support or not. The voting is expected to be held later on today and we believe that the gold prices are likely to be impacted due to that. For now, we believe that the gold prices would continue to range leading up to the voting.

Gold Trades Within a Tight Range

A failure to pass the bill could be bad for the dollar and this would ease the path towards 1260 for the gold prices while a passage of the bill could give a temporary respite for  the dollar which is unable to string together a decent bull run despite the rate hike in March and also despite the talk of further rate hikes during the course of the year. So, it should be an interesting time late in the trading day and it would be advisable for the traders to watch the action from the sidelines rather than getting tied up in all the volatility that is likely to arise surrounding the vote.

Oil prices continued to trade near the range lows as the bulls have not been able to make any impact on the prices. To be fair to them, the fundamentals and the data that is incoming have been against them. The incoming data has been showing a build up of the inventory and by and large, the failure of the production cut deal to have its desired effect on the price of oil. With this, comes the doubt on whether the production cut agreement would be able to proceed beyond the middle of this year. A combination of these factors has kept the oil prices under pressure.

Silver also continues to trade within a tight range as it awaits for some cues on what the next direction is likely to be and this is expected to continue, like gold prices, leading upto the voting in the US House.