Gold Prices Move Higher on Weaker Dollar

Gold prices rose yesterday on the back of some weakness in the dollar which has since helped the prices to move towards the 1280 region. This was expected as the market usually tends to get ahead of itself and expects too much from the global economy and the central bank leaders who always tend to under promise and under deliver according to the standards of the market. This was the case yesterday as well as the economic data and the news events from the US did not fulfill the expectations of the market and this led the dollar lower. The ADP employment report for this month came in stronger than expected but this was compensated by the revision lower in the report from last month. This meant that the data from the US continues to be choppy at this point.

Gold Prices Likely to Remain Buoyant

The market then looked forward to the FOMC minutes that was scheduled to be released at the middle of the US session and this also belied the market expectations as the rates were put on hold, as expected, and the minutes were quite similar to what it was the previous month. This was far below what the market had expected and this led to some weakness in the dollar. The dollar bulls though, drew some happiness out of the fact that the Fed members did not have anything adverse to say about the economy which helped to keep the dollar within range. Then there were reports that said that Powell has been confirmed as the next Fed Chair and this again was a bit of a disappointment for the dollar bulls who have been expecting the hawkish Taylor to be appointed to that post. All these events put a lot of pressure on the dollar which helped to push the gold prices towards 1280.

The oil prices consolidated for most of the day yesterday as it has achieved its immediate target of $55. Now the market is likely to see this consolidation and ranging to continue for the short term and this would then give way to more bullish pressure as the fundamentals continue to favor that direction in the short and medium term as well.

Silver prices have also recovered well during the course of the last 24 hours and they trade comfortably above the $17 region as of this writing and this bullishness is likely to continue for the rest of the day today as well.