Gold Prices Crash Lower on Dollar Strength

The gold prices have fallen through towards the support region at 1280 after briefly threatening to break through higher on the back of increased global risks and also the threat of a trade war breaking out between some of the major economic powers of the world. It has to be said that the threat of the trade war continues to dominate the market headlines and it is likely that it will begin to have more of an effect on the world economic order in the medium and the long term but for now, the investors and the traders seem to be focussed on the events and the issues at hand rather than thinking much about the medium term as such.

Gold Prices Lower

The gold prices have fallen mainly due to the dollar strength that has been seen all across the markets. The impact of the dollar strength has been varying from market to market but the impact on the gold market seems to be larger than most. The Fed has hiked rates in June and the effect of that continues to dominate. Also, on the other hand,  we are seeing that the Fed seems to be hawkish about the US economy and that presents a picture of further rate hikes in the near future. The market is expecting the Fed to hike the rates atleast 2 more times during the course of rest of the year and the market has begun to price in the same. This has also caused the gold prices to correct lower and it now trades in the lower part of its range over the $1280 region. Here, it is likely to find some support for the short term which could lead to a rebound.

The crude oil prices also seem to have been impacted by the strength of the dollar and we have got some much needed correction in its prices over the last few days. The prices have tried to rebound but we do not see the prices rebounding much higher than the $65 or the $66 regions over the next few days and this should lead to consolidation in the short term.

The silver prices have been trading between the $16 and the $17 regions for quite sometime now and the ranging continues to exist as of this writing as well.