Gold Consolidates Its Losses

Gold prices continue to consolidate in the 1280 region as the traders struggled to make much sense of what was happening in the gold market. In the overall market, we saw some dollar weakness during the early part of the day which was well utilised by the traders in the other dollar related pairs to push them higher and higher against the dollar. But surprisingly, the gold prices did not make much of a move. Over the past couple of months, the gold traders had made use of every small opportunity to push the gold prices higher and higher and so it was a surprise that they could not do it this time.

Gold Under Pressure

During the second half of the day, we saw the US Treasury Secretary Mnuchin stating that it is very likely that the US is going to see some large tax cuts in the near future which should help the corporates and the middle class. Over the last few weeks, some doubts on whether the Trump administration could push through the tax plan, began to do the rounds in the market and this had placed the dollar under pressure and the dip in the stock markets were also a result of that. But this confirmation from Mnuchin was enough signal for the investors to pump in their funds into the stock markets in anticipation of the tax cuts. If the funds move into the stock markets, it means that they are likely to move out of the gold and thats why we have seen the gold prices under pressure over the last 24 hours. But it is to the credit of the gold bulls that they have managed to keep the gold prices near the range highs despite all the pressure that is building.

Oil traders chewed on their losses from the previous day as oil continued to trade above the $50 region. We had mentioned that the region between $50 and $50.5 is likely to lend a lot of support for the oil prices and this region is going to be very crucial for the traders going forward. A break of this region could push the oil prices towards $47 and upset the balance between the supply, demand and the prices.

As mentioned yesterday, silver prices have made their way to the $18 region where they are trading as of this writing. This will be a crucial region where there is likely to be a battle between the bulls and the bears to see who takes control.