Gold Prices Correct Lower on Global Cues

Gold prices have been moving lower over the last 24 hours, something which it has been doing over the last few days as well. We have been mentioning in our forecasts that the global stock markets seem to be in a cycle where it is likely to move higher and higher in the short and medium term as well. We have also been saying that with the central banks around the world now shifting to a policy of interest rate hikes, there is likely to be a fundamental and sea change in the overall trend in many instruments. These couple of events are likely to keep the stock markets in a bullish trend and the gold prices under pressure and this is what we have been saying over the last couple of weeks.

Gold Prices Move Through 1280

Though the gold prices shot higher through the 1300 region on the back of some dollar weakness and increased risk in the Korean region, we have seen the prices correcting back over the last couple of days and yesterday, we saw the prices fall through the 1280 region where it trades now as of this writing. We believe that this weakness is likely to continue in the short and medium term. The only event that could pose risk for the gold bears is the escalation of tension once again in the Korean region. The situation there is still very fluid and anything could happen anytime in that region and thats what is making the gold bearish trade a risky one.

The oil prices have been trading within a tight range over the last few days and this has been the case since the beginning of the week. On the other hand, this is something that was expected from the oil market considering the lack of major fundamental drivers as far as the oil prices are concerned and also due to the fact that the prices are very close to the $53 region which makes progress difficult for the bulls. What should keep the bulls happy is that the prices have not fallen through and continue to maintain a bullish momentum.

Silver prices have been following the gold prices lower but the pace of the fall in the prices have been much slower when compared to the pace of the fall in the gold prices. Silver prices tend to move in fits and starts and that is why we are seeing the prices trade just below the $17 region as of this writing but it is likely to stay weak as the stock markets move higher.