Gold Prices Consolidate

Gold prices continued to consolidate over the last 24 hours as the market turned choppy due to the lack of direction in the market. The dollar has been on the backfoot since last week and its position was further weakened due to the fact that the FOMC minutes did nothing to add to the markets confidence (or the lack of it) in the dollar. The PPI data from the US came along expected lines and hence the reaction of the markets to it has not been much. The gold prices are now in a familiar resistance region over the past couple of days and we believe that the data from the US later in the day is likely to determine the short term direction of the dollar and hence the gold prices as well.

Gold Prices Await US CPI Data

We have the CPI data and the retail sales data from the US that will be released later in the day during the US session. After the employment report, these 2 pieces of data are supposed to be the most important for the US economy and hence will be watched very closely. The CPI inflation data is something that the Fed members would also be watching as it is likely to sway their decision regarding the rate hike in December. The dollar bulls would be hoping for some strong data so that they can build in some dollar longs and bring in some correction in the gold prices.

Oil prices continued to trade strongly and they stayed pretty much on course over the last 24 hours in their quest for the $55 medium term target. As we had mentioned before, the path towards this target is unlikely to be very easy as far as the oil prices are concerned as the bulls have repeatedly failed in this region over the last several months. But we believe that this is the price region that would keep the OPEC producers comfortable and hence they are likely to do anything to push the prices towards the $55 region.

Silver prices also continue to trade in a buoyant manner and they are also likely to be influenced by the direction of the dollar once the data involving CPI and retail sales is released. Traders would be well served to wait for the data and watch the reaction before jumping in.