Commodities Trade Strongly As Dollar Weakens

Gold Prices continued to make strong progress as the dollar weakened across the board for most of the day on Friday as well. We had mentioned a similar thing as we said that if the dollar continues to weaken, then gold is the most likely to take full advantage of that going forward as it has been doing the same over the past few months. Gold prices had risen by over $100 in a couple of months despite the underlying strength of the dollar that was evident for everyone to see and the correction in the prices came about only on the realisation that the Fed is about to hike rates in March and that would also ensure that there would be atleast 3 rate hikes during the course of the year. But now, with the Fed specifying that the rate hikes would come about only based on the incoming data, we are in a situation where the dollar is on the backfoot and the gold bulls have been using this to push the gold prices higher and higher.

Gold Continues to Trade Strongly

The gold prices have broken through 1230 and they trade well above that as of this writing. We believe that this has opened the path towards 1244 in the short term for the gold prices and it would be interesting to see what happens to the gold prices at that region and whether it break through and goes through towards 1260 to form a double top or whether the dollar strength returns and pushes the prices back towards 1220 in the short term.

Oil prices continue to flounder below $50 and as we have been repeatedly mentioning in many of our forecasts, this is set to continue in the near future as the oil inventory builds up. We are also seeing that Russia and a few other oil producers have committed to the production cut agreement, despite the setbacks, till atleast June and so we should see the oil prices continue to trade below $50 till atleast that time. It will be interesting to see what stance the oil producers take in June when they discuss the agreement again and that should determine the next direction for oil prices.

Silver prices also continue to trade in a very buoyant manner, in line with the gold prices, and as we had mentioned much earlier in our forecasts, we could see the silver prices moving towards the $18 mark in the short term.