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Gold Prices Recover As Global Risks Rise

By:
Colin First
Updated: Aug 9, 2017, 07:19 UTC

After a few days of consolidation and ranging, we saw a day of action in the gold prices yesterday. It was a day of 2 halves as far as the gold prices

Gold

After a few days of consolidation and ranging, we saw a day of action in the gold prices yesterday. It was a day of 2 halves as far as the gold prices were concerned as the prices moved this way and that during the different parts of the day. For most of the day, the gold prices corrected lower on the back of some strong recovery in the dollar strength and they moved lower towards the support region near 1250. We had mentioned in one of our earlier forecasts that with the prices falling, the 1250 region would become key and if the prices break through this region, then we could possibly be looking at much lower prices. But the bulls managed to make a stand in this region and though the dollar got a boost from the strong JOLTS employment data, it wasn’t enough to push the prices much lower.

Gold Prices Fall, Then Rise Again

Then reports started coming in about the risks being continued to be posted by North Korea as they once again launched threats against the US. North Korea has been a thorn in the flesh for quite some time and the market is always wary about what they are upto and yesterday, we saw them increase their threat levels by a notch or two by threatening to attack Guam. Trump is also not a man who takes things lying down and this war of words led to a risk off mode in the market which meant that the yen and gold gained across the board. This helped the gold prices to recover and they have since risen by more than $10 and the prices trade comfortably above $1260 region as of this writing. Gold prices are buoyant once again and we do not see any further danger to the bull run in the gold prices. We might see some consolidation and ranging but we believe that the bull run is here to stay.

Gold Hourly
Gold Hourly

Oil prices also continued to consolidate ahead of the release of the oil inventory data from the US later in the day today. With the OPEC having done what it can, the oil prices are now at the mercy of production and inventory data and that is why the data later in the night today would be a crucial piece of information and likely to bring in some volatility in the oil prices in the short term.

Silver prices followed the gold prices in moving higher during the course of the last 24 hours as the global risk level rose and this pushed the funds into safe havens like gold and silver. We are now seeing the silver prices trade strongly just above $16.5 and the prices are expected to hold steady in the short term.

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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