Gold Prices Under Pressure from Strong Dollar

Gold prices continued to move lower for the second day yesterday as the open of the day was probably the highest that the gold prices got to for the rest of the day and it was all one way traffic ever since the market opened for the day yesterday. The prices moved below the 1280 mark and continued lower and went as low as 1271 and so far, it has not been able to bounce by much and continues to trade near that price range as of this writing. The gold prices moved lower due to the ease of the risks and tensions across the world which helped the stock markets to recover. And when the stock markets recover, it is generally the funds in gold that get diverted to the stock markets and that is one of the reasons why we have seen the stock markets moving higher and the gold prices falling over the last couple of days.

Gold Back Into Yearly Range

Another reason for the fall in gold prices yesterday was the continuation of the recovery in the dollar strength as the retail sales data from the US came in much stronger than expected. This helped to support the dollar and it strengthened all across the markets which pushed the gold prices down even further. We were looking out for a breakout in the gold prices which would have helped it to move out of its yearly range but with that breakout not forthcoming, we are  back into the usual range for the gold prices which should see the prices moving slowly lower in the short and medium term.

The oil prices also continued to consolidate as they await the inventory data from the US later on in the day. The prices have been weak due to weak demand, a strong dollar and supply concerns and these factors have dominated the oil market over the last few days so much that even a strong inventory data last week was not enough to lift the oil prices. The prices are likely to continue to be under pressure in the short term.

Silver prices have also been trading in a weak manner as the move above the important $17 region fizzled out and it is now clearly back below that region and looking weak, in line with the price action in the gold market. This is likely to continue in the short term.