Gold Prices Continue to Push Higher

As we had mentioned in our forecast yesterday, gold prices continue to be the biggest gainers of the weakness in the dollar over the last couple of days and it continues as of this morning as well. After breaking through the 1280 region, the prices have continued moving higher and now trade well above the 1285 region as of this writing. The dollar seems set to weaken in the short term and the gold bulls seem to want to make full use of it and they have been pushing the prices higher ever since. The prices had fallen over the last couple of weeks on the back of the market believing that the Fed would hike rates in December. The minutes from the last meeting had hinted at that and the Fed members had also said that the door was open for the same.

Gold Prices Continue to be Buoyant

But for that to happen, the incoming data should be strong enough to push the Fed into action. But of late, the incoming data has been anything but that. The biggest blow came in the form of the NFP which turned out to be much weaker than expected as it came in negative. The wages data was strong but it was more due to the added work due to the hurricanes in the US rather than anything fundamental. This has now raised the question on whether the Fed would indeed hike rates this year and this has placed the dollar on the backfoot and helped the gold prices to gain. The FOMC minutes that will be released tomorrow is likely to shed more light into this and till that time, we can expect this bullish trend to continue.

The oil prices continue to trade within a tight range as the market recovers from the oil over the weekend. The medium term target continues to be $55 as far as we are concerned and we believe that the market is building towards that. We have been bullish on the oil prices for the medium and long term ever since it hit the lows at around $43 a few months back and the OPEC also seems quite determined to push the oil prices higher.

Silver prices have also moved higher, in line with the gold prices, over the last 24 hours and they are likely to continue to be bullish for today as well. This is more due to the weakness in the dollar caused by some weak incoming data.