Gold Continues to Trade in Buoyant Manner

After a brief period of bearishness during the month of August, we have seen the gold prices continue to trade within a tight range as the prices begin to consolidate in a slow and steady manner.

The prices have been able to hold themselves above the 1180 region over the last several days and this has happened despite the fact that the dollar has managed to gain in strength during this period. It is to the credit of the bulls that they have been able to manage to keep the prices buoyant during this period but the situation is still murky.

Gold Continues Above $1180

There are no clear signs of which way the prices are going to go in the near future and though the prices have been trying to form a base at this point of time, we are not seeing any signs of bullishness in the markets as yet and this would be a matter of concern for the bulls for the short and medium term. Looking at the other instruments, there are signs that the dollar bulls might be getting tired and this could lead to a bout of dollar weakness and the bottoming signals that we are seeing in the gold prices could also be a further signal of that.

If that is indeed the case, then we should see the gold prices continue to consolidate in the short term as the market and the dollar sorts itself out and then we should see a period of strength in the gold prices in due course of time. This should help the prices move back through the $1200 region during this period and then the bulls could then be aiming for much bigger things in the short and medium term. But for that, there needs to be an additional momentum that needs to be generated by the gold bulls and we will have to wait it out till we see the signs for that.