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Gold Prices Correct As Fears Recede

By:
Colin First
Published: May 19, 2017, 04:39 UTC

Gold prices corrected yesterday, something that we had mentioned in our forecast yesterday morning. It was a natural thing to happen considering the fact

Gold Prices Correct As Fears Recede

Gold prices corrected yesterday, something that we had mentioned in our forecast yesterday morning. It was a natural thing to happen considering the fact that the gold prices had been tearing higher over the last few days as the political turmoil in the US began to spread all across the markets. This sparked panic and confusion and it is only during such situations that the funds get moved into safer assets like gold and silver. This was the reason for the rise in the gold prices over the last few days. Yesterday, we saw a bit of relief in the markets as the former FBI Director Comey said that Trump did not interfere in any ongoing investigation. This provided a much needed relief for Trump and the dollar as well and the dollar recovered a bit across the board.

Gold Rests at Support

Yesterday morning, the gold prices had reached the 1260 region, which was a region where it had failed to break through for the past couple of times. Hence, we had expected a correction in this region and we did see that during the course of the day as the prices fell back towards the broken resistance turned support at 1248 where the gold prices trade of as this writing. With the absence of much news and with the reports about Trump slowly fading into the background, we can expect the markets to slow down and hence we can expect some consolidation and ranging in the markets in general and in the gold prices as well.

Gold Hourly
Gold Hourly

The oil prices have just broken through the $50 region as of this morning though we cannot find any specific reason for the same. Also, this break through has happened in the morning when the markets are light and so we have to wait and see whether this break holds of falls through during the course of the day. There have been reports of the production cut deal being extended though there has not been any official announcement as yet. This has kept the bid under the oil prices and helped it to trade above $49 over the past few days and thats where it ended the day yesterday as well. But the oil prices seemed to have received a boost this morning which has helped it through $50 and we wait to see if it holds. If it does, then we could see the oil prices move towards the $53 region in the short term.

Silver prices corrected further yesterday, following the footsteps of gold prices as the global risks and fears receded a bit. The prices trade just above $16.5 for now and with $17 as the ceiling, we should see some consolidation and ranging here.

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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