Gold Prices Bounce Off Support
The gold prices corrected during the course of the day yesterday, a period of correction which does not mean much in the larger scheme of things, as far as we are concerned. There does not seem to be any major change in the trend on account of this correction and it remains to be seen how the price action pans out for the rest of the day before we can confirm seeing signs of trend change. Yesterday, the dollar managed to gain some of its strength back as Trump said that he expects the dollar to remain strong as the incoming data continues to remain strong. This is seen as negating some of the comments made by the treasury secretary who said that he prefers to see a weaker dollar. These comments from Trump provided the much needed relief for the gold bears as they used this opportunity to push the prices towards the 1345 region.
Gold Prices Choppy
We had mentioned this region as a region of support and resistance and the visit back to this region is seen as a normal correction. The prices have since bounced back as the effects of the comments begin to wear out and now we see the prices trading comfortably above the 1350 region as of this writing. The close for this day and week is likely to be very important to determine the short term direction for the gold prices. We are seeing some early signs of a dollar recovery but we will have to wait to see it getting confirmed. We have the advance GDP data from the US later in the day and that should give us a hint on whether Trump is correct. If it comes out strong, then we could see a strong move from the dollar which would threaten a break through the 1345 region.
The oil prices also corrected slightly lower as they also seem to have been impacted by the strength of the dollar but there is no danger to the bullish trend as such as the fundamentals and the demand continue to remain strong.
The silver prices have also had a choppy session yesterday, in line with the gold prices and they continue to trade in a steady manner in the $17.5 region. Like the gold market, the close for the week and the day is likely to determine the direction for next week.