Advertisement
Advertisement

Gold Prices Rocket Higher As Dollar Tumbles

By:
Colin First
Updated: May 18, 2017, 07:20 UTC

Gold prices skyrocketed yesterday as the political turmoil in the US continued to take its toll on the dollar. The political troubles for Trump and his

Gold Prices Rocket Higher As Dollar Tumbles

Gold prices skyrocketed yesterday as the political turmoil in the US continued to take its toll on the dollar. The political troubles for Trump and his team do not seem to have an end and when he is not tweeting himself into new problems, it is others who are getting him into more and more trouble. For this week, all his troubles have been about reports of him having leaked sensitive info to the Russians at his office and accusations that he interfered with an ongoing investigation, both of which are extremely damaging for his Presidency. A combination of these events and bad data from the US has snowballed into a huge problem for the dollar and as we have seen over the last few months, gold bulls have taken full toll of any weakness in the dollar.

Gold Bulls May Seek Some Rest

This was proved yet again yesterday as the gold prices breezed through our target at 1248 and now they sit at the next strong resistance region of 1260. Here, a big challenge awaits for the gold bulls and we believe that we might see a bit of correction here as the gold bulls take some rest and investors take off some profits in this price region. We have also seen the market expectations of a rate hike in the US in June begin to evaporate, amidst the heat of the political debate in the US and this is again a dollar negative and we are seeing some roll back in the pricing in of the rate hike over the last couple of days. We now wait to see whether the troubles begin to die down and move out of the headlines or whether it is going to continue and the gold prices are likely to move according to how the situation surrounding these events pan out.

Gold Hourly
Gold Hourly

Oil prices made another attempt to break through the important $50 barrier as the oil inventory data came in and showed a less than expected build but this attempt did not last long and it was quickly met by a lot of selling in oil which pushed the prices back towards the $49 region. But the momentum seems to be up and it seems that it is going to require only a small spark in the form of slowing production and inventory for the oil prices to rocket again.

Silver prices, surprisingly, did not follow the gold prices and in fact had a period of consolidation and ranging yesterday. While the gold prices rocketed higher, the silver prices made a feeble attempt to break through the $17 region which was promptly sold into and now the prices sit below the $17, looking pretty weak.

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.

Did you find this article useful?

Advertisement