Commodity Markets In Still Mode Ahead of Jackson Hole

Gold prices continue to coil up ahead of the speeches from the different central bank leaders at Jackson Hole later in the day today. This is the event that the market has been waiting for since the beginning of the week and hence it is natural to expect a lot of volatility surrounding this event which is likely to happen during the US session. The Fed Chief Yellen is not expected to reveal much and this is likely to keep the dollar under pressure. But it is the speech from Draghi that is likely to be watched much more closely by the markets as a part of the markets expects Draghi to spell out major changes in policy including setting the timeline for QE tapering as well. If this happens, then the euro is expected to move up and strengthen while the stock markets, especially in Europe, are expected to fall.

Gold Prices Crawl Along

This is likely to be supportive for gold prices which are then likely to challenge the 1300 region again in the short term, probably even today. If Draghi chooses to be dovish, then we can expect a correction in the gold prices which is likely to carry it towards the 1255 region in the short term. But considering the fact that the corrections in the gold prices have been so few and far between of late, we believe that there is a lot of buying happening in gold which is likely to keep the prices supported and hence we favor the upside.

Oil prices continue to chop around with no specific direction. The production and inventory data that is coming out of the US, including the rig count, seem to be supporting the oil prices for now but the market is still to believe in the bullish run as yet and that’s why we are seeing the prices chop around and this is likely to last for the short term as the attention of the market is focussed on gold and the euro dollar as well.

Silver prices have also been crawling along over the last 24 hours, in line with the gold prices and the volatility in the silver prices is expected to pick up only later in the day as the Jackson Hole meeting concludes and we get the speeches from the various Central Bank leaders.