Gold Continues to Chop Around

The gold prices have dropped back to the 1270 region on Friday on the back of some dollar strength that has been seen over the last few days. This is despite the fact that the stock markets have been correcting lower and the dollar being on the backfoot due to the postponement of the implementation of the tax cuts for corporates. This is viewed as a setback for Trump but so far, the gold prices do not seem to be showing too much of an impact at this point of time. The gold prices are also on the backfoot and as we have been saying quite a few times already, the gold prices are likely to be in a long term bearish trend and though this may not result in the prices falling too steeply at any point of time, the prices would continue to be under pressure which would mean that any bounce in the prices can be sold into.

Gold Prices To be Under Pressure

This has been the kind of trend that we have been seeing over the last month or so and this is likely to continue for the medium term. The traders would be well advised to mark off regions of resistance and ensure that they trade with tight stop losses. The gold prices are known to go off at the slightest hint of an increase of risk and with the Korean region being under constant tension over the last couple of months, it is likely that tension could increase at any point of time which could drive the gold prices higher for the short term. This is why it is important for the traders to save themselves from such choppy price action.

Oil prices also continue to consolidate but they have moved slightly below the $57 region where they continue their consolidation. With the lack of fundamental drivers and with the oil prices seemingly unaffected by the dollar strength and weakness, we are seeing the prices being driven purely by the crisis in Saudi Arabia and that is why we believe that the prices would consolidate and correct towards the $55 region in the short term before the next bullish move higher.

Silver prices have also been chopping around and this follows the choppy action that we have been seeing in the gold prices over the last few days. This is likely to continue in the short and medium term with a bearish outlook.