Gold Prices Rise on Weak Dollar

Gold prices ended their period of correction and began to move higher once again on the back of weakening dollar prices all across the board. This weakening of the dollar has helped the gold prices to recover from below 1250 and move above 1260 as of this writing and if and when the gold prices move past this region in a clean manner, we should be targeting 1280 and higher. The gold prices have been increasingly steadily ever since they made a trip to below 1210 a few weeks back. At that point of time, the dollar had been steady and had not been weak. Also, there was a lot of talk about tapering from the ECB. But since then, the dollar has taken a hiding all across the markets due to the bad economic data and lack of support from the Fed. The ECB has also tried to deny any move towards tapering and though the market does not believe it, it is generally expected that the tapering would happen after the summer.

Gold Set to Rise Further

Due to both these events, we are seeing the gold prices gain in strength over the past couple of weeks. The weak dollar and the weak economic data from the US has also led to doubts on whether there would be any further rate hikes from the US this year and hence, we are seeing some funds flowing back into gold and silver from the dollar and this is helping to keep the prices upbeat for now. We expect this steady rise in the gold prices to continue in the short term as the dollar continues to remain weak.

Oil prices continued their steady rise over the last 24 hours with the oil inventory data, which showed a larger than expected draw in the reserves, helping to keep the bid under oil. This is expected to keep pushing the oil prices higher and this has been the trend over the past few weeks. The move has been interspersed with periods of correction but the rise has been slow and steady and for us, this rise had been signalled long back and since then we have advised our readers to continue to be long at every available opportunity.

Silver prices also moved higher on the back of a weak dollar and with the prices having crossed the important $16.5 region, the bulls would now be looking at $17 as the next target. We believe that the silver prices have the potential to move even further as long as the dollar weakness continues.