Gold Prices Fall Lower on Dollar Pressure

Gold prices fell back into its range over the last few weeks as the stock indices moved higher and the risk sentiment around the globe picked up which put a lot of pressure on the gold prices. After trying to break through the 1300 region a couple of days back and continue to hover near the highs of its range over the last couple of days, the gold prices have fallen towards the 1280 region over the last 24 hours and continue to look weak. We expect the gold prices to receive some support in this region though, which should pave the way for more consolidation and ranging over the short term. The dollar has also managed to hold steady during this period, which has only added to the pressure on the gold prices.

Gold Falls back Into Range

The dollar has been well supported by the passage of the tax reform bill through the Senate and it is widely expected that the bill would have a smooth passage through till completion. This is likely to give a boost to the dollar and the US stock indices as well and that is what is being priced into the markets at this point of time. This is adding to the pressure on the gold prices and we expect the gold prices to continue to consolidate and range as the market has learnt to deal with the risks, like those in the Korean region, and as a result of that, those events have been having very less impact as time goes by.

Oil prices fell early yesterday as the meeting of the OPEC countries began and there was a lot of fear that the oil producers may not extend the production cut. This put the oil prices under pressure as it broke below the $57 region. But they got a boost later in the day as in the meeting, the oil producers decided to extend the production cut deal by 9 months. This helped to push the oil prices back above $57 and it continues to trade in that region as of this writing. It is likely to remain strong and gain in strength in the short term which should help to push the prices towards the $60 region.

Silver prices have also been falling over the last 24 hours and are now trading in the $16.5 region as of this writing. We have been mentioning about the lack of momentum in the silver prices over the last few days and they have since dropped at the first sign of strength in the dollar prices and the stock markets.