Gold Finally Breaks Through
Gold prices have been moving up steadily over the past 24 hours on the back of some serious dollar weakness all across the board. What should keep the bulls in cheer is the fact that the move up has been able to break through the resistance region around the mid 1240s and the instrument now trades above 1250 as of this writing. We had felt that the break through this region would have been a bit more challenging and time consuming but the prices simply moved through this region like a hot knife through butter.
Gold Looks Good for More
Gold prices now seem to be set to move through till 1270 and the next resistance is likely to come there. It is also our short term target which we have been mentioning over the last few weeks. We had expected the FOMC minutes to be hawkish which would have helped to hold back the gold bulls atleast for some time but that was not to be so.
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The FOMC meeting minutes were largely a disappointment to a majority of the market as the Fed didnt guarantee or even indicate a hike in March and instead chose to keep it open ended by saying that it would be sometime soon. This could be that the hike could be anytime from March to May and this also decreases the possibility of three rate hikes this year. All these have weighed on the dollar and hence it has been weakening over the last 24 hours. This opportunity has been well used by the gold bulls, as they have been doing over the past few weeks now and they have managed to push the gold prices higher and higher.
Oil Prices Still Consolidate
Oil prices also continued to remain buoyant as the inventory data from the US showed that the production from the US has hit 9 million barrels a day and there seems to be no signs of a let up. But the production cut deal between the other oil producers has been going on very well and this is one of the primary reasons which have helped to hold up the oil prices despite the increase in oil production from other areas. We expect the oil prices to consolidate with a bullish bias for the day.
Silver prices have also been able to make some steady progress, in line with the gold prices as they broke through $18 easily and are set to likely challenge $18.5 in due course of time.