Gold Bulls Consolidate Gains
Gold prices have been in a mode of consolidation over the past 24 hours near the highs of their latest range. We had mentioned yesterday in our forecast that, after having made that huge move on the back of the Fed statement, it is likely that the gold prices is about to consolidate within the range between 1220 and 1230 for some time before the price action and the fundamentals would decide the next course of action for the gold bulls. The gold prices have been generally quie resilient even when the dollar strength has been on and off and it is only the expectation that the Fed would be very hawkish in its statement that had pushed the gold prices lower.
Gold Prices Stagnate, For Now
But that expectation has now been belied and so we see the gold prices rocketing upwards and this is expected to continue for the next few days as well as the dollar bulls lick their wounds and get ready for the next round of action. Though the market reaction to the statement has been quick and brutal, on a fundamental and long term basis we still believe that the dollar is likely to be bullish and this should get reflected in the prices in the medium term if not in the short term. That is why we are seeing the gold bulls still being a bit wary of pushing the gold prices too far and face a lot of selling as they move ahead.
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Oil prices continued to flounder below the $50 mark, something that it has been doing since the beginning of the week. Any kind of news has not been able to lift the oil prices and with it having fallen below the crucial $50 mark, we expect the prices to continue to remain below this important figure in the short term. And the more time it spends below this mark, the more cracks are likely to appear in the deal between the oil production countries for the oil supply cut and this could put the oil prices under further pressure.
Silver prices also consolidated yesterday, following the pattern set by the gold prices over the past 24 hours and this consolidation is likely to continue for today as well as there are not specific fundamental news pushing the prices in a specific direction as yet.