Gold Prices Continue to Fall

Gold prices continued lower yesterday and as we had pointed out in our forecast yesterday, it looks as though gold could be in for a long cycle of weakness. All the factors that had favored it in its bullish run have now been withdrawing one by one and the effect of that is the fact that the gold prices have been falling during this period and are likely to continue to fall in the medium term as well. We had pointed out how the various central banks are at the end of the rate cut cycle and have now begun their rate hike cycle and this is bound to keep the pressure on the gold prices. As the central banks hike their rates, it is natural for the funds to flow into those countries and the stock markets as well and this will keep the gold prices under control as the funds get pulled out of the gold and ilver markets.

Gold Prices Likely to Stay Weak

The US has already started hiking rates and Canada has joined them as well and it appears that is is only a matter of time before the UK joins them as well. Considering all these factors, we expect the gold prices to enter into a large weakening cycle. Of course, there will be bounces in the gold prices, as is usual for any trend where corrections are normal but the overall trend is likely to be downwards and any bounces in the gold prices towards the resistance should be viewed as an opportunity to sell gold contracts.

Oil prices have been weakening since the beginning of the week as the conflict between the Kurds and Iraq seem to be coming to an end and this is likely to restore production and supply in that region. Technically also, we had pointed out that the prices are likely to face some stiff resistance in its move towards the $53 region and it is going to take a bit of time and a lot of consolidation before the prices push through towards $55.

Silver prices have also been correcting lower, in line with the gold prices, and like gold, they are also likely to be in a long cycle of weakness as the funds get pulled out of the gold and silver markets and get invested into bonds and ths stock markets as well. Like gold, any bounce in the silver prices are also likely to be met with some strong selling.