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Gold Prices Consolidate for Next Move

By:
Colin First
Updated: Aug 8, 2017, 07:33 UTC

Gold prices continued to trade in a weak manner for much of the day yesterday though they have shown some signs of life in early morning trading today. We

Gold

Gold prices continued to trade in a weak manner for much of the day yesterday though they have shown some signs of life in early morning trading today. We have seen the dollar getting hit across the board today morning though there has not been much fundamental or economic events to support such kind of a move. This has helped the gold prices recover slightly and they trade just above the 1260 region as of this writing. Though the gold prices continue to trade in a weak manner, the way the prices have been moving and consolidating looks as though the prices are getting ready for an upmove and not a downmove. We believe that despite the strong NFP and wages report on Friday, the dollar is not out of the woods as yet and it is only going to take more time for it to establish its recovery.

Gold Consolidates for Upmove

In this meantime, we expect the gold prices to have an opportunity to pick pace again and move up but it remains to be seen whether the gold bulls have the pace to run with it. As we had mentioned a few times earlier, the gold prices have risen from the lows near the 1200 region continuously over the last few weeks and it is likely that many are sitting on some good profits and hence may not have the will to push the prices further. We envision at least one more visit to the highs of the range in the short term and then the price action over there will determine the next direction that the gold prices are likely to take.

Gold Hourly
Gold Hourly

Oil prices also spent the day yesterday in a consolidation manner with not much of liquidity or volatility around. This was only to be expected as it was a general trend across all the markets yesterday. It was a Monday with lack of much economic news or events and it is the summer season as well with many of the traders out on travel or holidays and hence the volatility is likely to be low during this period. As we have been mentioning repeatedly, the uptrend in the oil prices is here to stay and it will only get stronger.

Silver prices have not recovered by much and continue to consolidate and range below the crucial $16.5 mark as of this writing. We believe that this kind of choppy trading is likely to be the trend in the short term and traders would have to look elsewhere for strong trading opportunities.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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