Commodities Consolidate in Choppy Trading

Gold prices continued to consolidate and range during some choppy trading over the past 24 hours as the traders wait for some fundamental push in a specific direction to move the prices. We had mentioned in our forecasts last week that with the gold prices unable to surmount 1300.

We are likely to see the gold prices correct towards the broken resistance turned support at 1265 region and this has what has happened over the last few days as the markets are now under a risk on mode which has seen a pullout of funds from safe assets like gold and these funds are now being pushed into risky assets like the stock markets. This change has come about as the results of the French elections over the weekend has more or less confirmed that we are likely to see a business and euro friendly President at the helm in France and this has helped to lift off some of the gloom and doom that surrounded the markets last week.

Gold Getting Ready for Some Action

It was this uncertainty that kept the gold prices buoyed last week but with that disappearing, we are seeing the investors giving up gold in the hope of better returns by investing in the stock markets. We believe that gold prices would continue to consolidate and range in the 1265 region over the next few days and we think that this is just preparation for the next leg of the bull run from the traders. The next leg should be able to carry the prices towards the 1300 region and probably beyond as well. But as we are nearing the month end, we are likely to see a lot of month end flows which means that the attention is likely to be diverted away from gold for now.

Oil prices continued to consolidate in the $49.5 region as the oil inventory data from the US was largely ignored and did not have much of an impact on the oil prices as it was on expected lines and also due to the fact that the data was already released the previous day via API to the large traders and investors. Oil prices are expected to continue to trade weakly over the next few days with the target in the $47 region.

Silver prices also spent most of the last 24 hours in a consolidation mode as the traders looked towards the gold prices for some direction.This choppy trading is likely to last over the next few days.