Gold Meanders in Slow Markets

Its been a quiet day all day in the markets as the currencies settled down into tight ranges in anticipation of events further down during the week. It is a holiday in the US on account of President’s day and though some argue that such a day doesnt deserve to be celebrated in the light of events over the past month, there are others who wish that the present does not ruin the remembrance of the past.

Gold prices have also been trading within a tight range today with neither the bulls nor the bears being able to take full control as of today. Gold trades near the highs of its range and so it is indeed a battle between the bulls and the bears to see if the range can be broken. With the US on holiday, we do not expect any changes in the range for today though we may see some action tomorrow in anticipation of the FOMC meeting minutes that are scheduled to be released during the middle of the week. The markets expect the Fed members to be hawkish in line with the hawkish speeches over the last couple of weeks and if that happens, we could see a correction in the gold prices and it may move towards 1220. Yellen had also kept the door open for a rate hike as early as March and so any sentiment other than outright hawkishness in the minutes would be viewed as bad for the dollar and could see gold break through the top of the range.

Oil prices continued to meander and trade within a tight range, as has been the case over the last few weeks and the consolidation was made worse by the US holiday which ensured that the range was pretty tight even by the standards of the latest oil prices. The bulls have been finding it difficult to push the prices higher than the current range due to the build up of the oil reserves in North America and this continues to threaten the uptrend that the oil prices have seen during the later part of last year.