Gold Back Within Range as Dollar Steadies

Gold prices continued to trade within range as there has not been many fundamental or economic drivers for the prices so far. The prices have been locked in a range between 1260 and 1300 for over 2 months now and there have been no convincing signs of a breakout as yet as the prices move up and down within range. There have been a couple of times when the prices have tried to break through the bottom of the range as well as the top but the attempts have been largely unsuccessful so far which gives rise to the notion that the ranging and the consolidation would continue for the short and medium term as well. We do not see any major fundamental changes for the rest of the year atleast which would push the prices in either direction.

Prices Likely to Remain Stable

The market has also already priced in the rate hike in the US in December and it is to the credit of the gold bulls that they have managed to hold the gold prices near the highs of its range despite this fact. We do not expect to see much increase in the strength of the dollar over the next month or so as the Fed transitions from Yellen to Powell and hence we believe that the gold prices could continue to range during this period. We would be in for a period of low liquidity later in the year and that is likely to be the only time when the traders have a chance to push the prices in either direction.

Oil prices have also been consolidating as the impact of the OPEC meeting, which decided to continue the production cut plan for 9 more months, has been largely ignored and the oil market seems to be set to move to the $60 region in due course of time. We expect some more consolidation and ranging in the markets over the next few days before the next bullish leg higher.

Silver prices continue to trade in a weak manner over the last few days as the prices have dipped below the $16.5 region over the last 24 hours and continue to trade there as of this writing.