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Gold Prices Fall Lower as Dollar Gains

By:
Colin First
Published: Oct 23, 2017, 08:12 UTC

Gold prices have been moving lower over the last few days which is in line with our forecast of weakening gold prices as part of the larger cycle wherein

Gold Monday

Gold prices have been moving lower over the last few days which is in line with our forecast of weakening gold prices as part of the larger cycle wherein the stock markets are likely to go ahead in a bullish trend which would in turn lead to the pullout of funds from safe havens like gold and silver and lead their prices lower during the short and medium term. We believe that this is what is happening in this markets and what should worry the gold bulls is that this could just be the beginning of the move and it could lead to much larger moves in the future.

Gold Moves Lower

Also, another point to note here is that the gold prices have bounced only when there has been a risk on the horizon and not due to any specific fundamentals as such. We have seen the gold prices rise in the last few weeks everytime there has been an increase in tension in the Korean region and this was followed immediately by a fall or a correction in the prices when the effect of the tension began to fade away. This shows that the support for the gold prices is very little and only a small part of the rise in prices is being driven by actual demand and more of it is being driven more by the weakness in the dollar and the rise in global risk rather than actual demand for the commodity.

Gold Hourly
Gold Hourly

The oil prices continued to hold steady as the bulls have been able to push the prices back through the $52 region over the last couple of days and the prices continue to trade in that region as of this writing. As the prices have approached the $53 region, we are seeing a situation where the prices have been moving in a slow and steady manner as the market awaits for a fundamental push from a specific direction which would help it to push through the $53 region and onwards towards the $55 region in due course of time. This is our medium target, something which we have been quoting for more then a couple of months now. It seems only a matter of time before this target is achieved.

Silver prices have also been correcting lower over the last couple of days and this is set to continue in the short term as the market comes to terms with the steady dollar and with the steady passage of funds from the silver and gold markets to the stock markets.

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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