Gold Corrects Lower as Risk Sentiment Improves

Gold prices corrected lower during the course of trading yesterday as the dollar managed to steady itself during this period and then there has also been a general improvement in the risk sentiment across the globe. It is during such period that the gold bulls find it difficult to push the prices higher as they come under increasing pressure due to the lack of demand. The stock markets are booming and this is enough reason for the investors to seriously consider moving their funds into them so that they could make some quick returns. That is why we are seeing the demand go down and the prices also follow the demand lower.

Gold Prices Move Lower

There is clearly a lot of selling in the 1320-1325 region and it is not going to be easy for the bulls to breach this region. Since most of this move higher has happened on low volume, we expect some sort of a correction but the credit has to be given to the gold bulls who have managed to hold the prices near the range highs despite the fact that the dollar has strengthened across the board and has brought about a correction in many of the other instruments during this period. This leads to hope that the uptrend may not be over as yet.

Oil prices continued to move higher and look well set to achieve their next target in the $65 region in a matter of a few days. It is indeed a huge bull run in the oil market over the last 5-6 months and we have been tracking this and mentioning this all through the journey. The current move higher is due to the inventory data which shows a larger draw than what was expected. This has fuelled this move and it is likely that the oil prices would continue even higher.

Silver prices fell through the $17 region for a brief while but have since bounced and now trade just above the $17 region as of this writing. Its price action mirrors that of gold and so watch out for what gold does.