Gold Prices Face Stiff Resistance

The gold prices made an attempt to break through the 1262 region during the course of the last 24 hours and it has largely been a failed attempt at the highs as we had expected it, atleast on the first time. We had mentioned in our forecast yesterday that the prices are likely to face a lot of selling in that region and thats what we saw yesterday. The gold prices have since backed off, largely due to the strength of the dollar, but they still continue to trade near the highs of the range which points to the fact that there may be another attempt at the highs and to break through the highs during the short term.

Gold Prices In Crucial Region

The move lower yesterday was not only due to the strong selling in the region but also due to the general recovery of the dollar across the board that we saw yesterday. This came on the back of a turnaround in the economic data with the consumer confidence and the advance trade balance coming in better than expected. This has raised expectations for a stronger GDP number from the US and this helped the dollar to strengthen all around. The dollar has been suffering over the last few weeks due to the bad incoming data but with such signs of recovery happening in the data, we are seeing a similar recovery in the dollar strength. Later in the day today, we are going to have the advance GDP data from the US and that is likely to have an impact on the strength of the dollar. If the data is weak, then there is a real chance that the gold prices might move through 1262 and move higher.

Oil prices continued to trade strongly and move steadily higher and they have moved above the $49 region as of this morning. A positive OPEC and a strong signal from them at the end of the meeting has raised the confidence of the investors and now we see some major investors and buyers joining the oil bandwagon which is only going too accelerate the prices even more. We had mentioned of this upmove when the prices were in the doldrums below the $43 region but the rise so far has been steady, strong and predictable, as far as we are concerned.

Silver prices also corrected back towards the $16.5 region during the course of the last 24 hours, largely following the price action of gold and the key would be the US data later in the day as this is likely to determine the direction for the next couple of trading days.