Commodities Consolidate as Month End Approaches

Gold prices continue to consolidate for the second day yesterday and this consolidation has been happening at the lows of the range near a support region. We had mentioned in our forecast yesterday that we are likely to see the gold prices consolidate in this support region as the instrument prepares itself for the next leg up. This follows from our forecast last week, when the prices were near the 1290 region, that there would be a correction towards the 1265 region which would be a part of a healthy correction that is seen in any bull run. So, the traders need to be wary of the gold prices here and those who would like to prefer a good risk to returns ratio can take a long here with a stop loss below the support region for the move back towards the 1300 region.

Gold Continues to Consolidate

The gold prices have been a bit subdued this week as the markets are in a full risk on mode following the business and euro positive results from the French elections last weekend. But with Trump at the helm, the risks and the uncertainties are never far away. Even yesterday, he upped his rhetoric by saying that the situation with North Korea was getting very very dangerous and also raised doubts on trade deals with South Korea. These events are likely to be the focus in the coming week and we believe that it will be only a matter of time before the risk off mode returns to the markets and this is likely to keep the gold prices buoyed.

Oil prices continued to see some choppy trading over the past 24 hours as it weakened during the early part of the day and moved towards $48.5 but it later recovered during the second half of the day to be back at where it started the day. This kind of choppy trading has become the norm for oil since the beginning of the year as there have been one or 2 big moves per month followed by a lot of consolidation and ranging. The bias is clearly bearish and the targets for this move are in the $47 region but it will be a hard and long slog towards that target in the short term.

Silver prices also continued to consolidate and as has been seen over the last several months, they tend to follow the gold prices and with the gold prices in a consolidation mode, the same can be expected from silver as well.