Gold Just Below $1200 and Looking HigherGold prices have been trading in a strong manner over the last few days and it seems as though the prices are trying to form a base.
There has been a talk in the market that the gold prices might fall as the US and the Fed have continued their policy of hiking the interest rates. This is expected to give a lot of strength for the dollar in the short and medium term and this is in turn expected to push the prices of gold lower.
But so far, the interest rate hike from the Fed has been minimal and one of the main reasons for that could be the fact that the Fed had made its intentions pretty much clear at the beginning of the year itself and hence the market is not surprised.
The Fed has been following the script pretty much to the T and this has helped the traders and the markets to be ready for what it has been throwing at them over the last few months. This has led to the dollar to strengthen in a slow and steady manner during the course of the year and that is also why we have been seeing the gold prices move lower during the same period. But unlike some of the previous times, the move lower has been slow and steady and there has not been any kind of knee-jerk reaction. We did see the gold prices dip briefly over the middle of last month but it has been fine with its moves since then.
The prices continue to trade below the $1200 region but it seems that some kind of base and support is forming in the prices and this could lead into a bull run towards the end of the year. The moves and the price action in the other instruments also point to a weakness in the dollar in the coming weeks but we will have to wait and see whether that indeed happens in the coming days. If it does, then we should see the gold prices shoot through the $1200 region once again.