Gold Meanders Along Waiting for Direction

Gold prices were stable for most of the last 24 hours as the market seemed to be in a wait and watch mode especially with respect to the gold prices. The dollar has strengthened across the board especially against the euro and the pound but it has not been able to make much of a headway against gold, atleast so far. Gold prices have been characterised with strong bullish undertones for most of the last 2 months and it continues to be so.

Gold Prices Stay Calm

The increase in dollar strength has had little to no effect on the gold prices so far as the gold bulls await the FOMC meeting minutes that is scheduled to be released tomorrow. With the minutes expected to be hawkish and probably even indicating a rate hike as early as March, we could expect the dollar to strengthen even further after the minutes are released and this could bring the gold prices under pressure.

A rate hike in March could probably confirm that we are going to have atleast 3 rate hikes this year and this should greatly cheer the dollar bulls who are then likely to take control and take the dollar on its next leg of a bull run, something that we have been expecting since the beginning of the year.

Oil Prices Trade Steady

Oil prices rose a bit yesterday but they were quite steady for most of the day as there was not much news around to drive the oil prices in either direction. It should be encouraging for the bulls that the oil prices managed to make progress despite the growing strength of the dollar but the risks around the pricing continue to exist.

It is not known how long the production cut deal is likely to last and with more and more production from those who are not part of the deal, the patience of those who are part of the deal should be wearing thin already. The producers are likely to meet in May or June and decide how far they would want to carry on with the production cut and how they are going to tackle the growth in oil reserves from the other producers which continue to provide a lot of supply and hence keep the oil prices down.

Silver prices also meandered along, as with gold prices and will continue to be led by the gold prices, as it has been over the last few weeks.