Gold Looking for Breakout

Gold prices continued to trade near its highs but the more time it takes to make a breakout through the highs, the more likely that it is going to fall as the bulls begin to lose interest. We still believe in the uptrend in the gold price and we believe that the prices will eventually push through 1300 and then on to 1310 but whether there will be a correction in between, as the prices spend a lot of time breaking through the top of the range, is something that we have to wait and see. Yesterday, we saw a rise in global risk in the form of a terrorist attack in Spain  and this led to a rise of around $5 in the gold prices as it closed above 1288 for yesterday. Today morning, it has corrected slightly lower but continues to trade in a strong manner.

Gold Finds the Going Tough

The European markets did not get too much of a chance to react to the developments in Spain and so when they open today, we expect the stock markets to move lower and this could spur a breakout in the gold prices. We believe that today could be a turning point as far as the gold prices are concerned with either a breakout or a correction happening with the prices. But with the increase in global risk and with the dollar generally on the backfoot all across the markets, we think that a breakout is likely which should carry the prices towards the 1300 region for now.

Oil prices continue to trade in a weak manner, as they have been doing all through the week and this is likely to continue in the short term. The choppiness in the dollar does not seem to have much of an effect on the oil prices but the prices are under pressure due to the drop in demand and supply concerns and even a positive note from the inventory side does not seem to have much of an impact on the oil prices. With the focus on global risk, stock markets and gold for now, the oil prices have been sent into a period of consolidation and ranging for now and this is likely to be the case until the prices get a push from somewhere.

Silver prices corrected slightly lower during trading yesterday though it continues to trade near the strong resistance region of $17. Like gold, silver prices are also looking for a breakout and if that comes along, then we could expect the prices to move towards the $18 region in the short term.