Gold Prices Shoot Higher on Weak Dollar

Gold prices have been one of the biggest gainers since Friday all across the markets as the weak data from the US provided some much needed relief for the gold buyers and this helped to push up the prices on the back of strong demand. As of today morning, the gold market seems to continue from where it left off as it moved through the 1280 region and trades comfortably above that. The fact that the Chinese traders are back into the market after their extended holiday could also be one of the reasons for the rise in gold prices. The demand for gold also generally picks up in India during this season and that could also be another reason.

Gold Prices Likely to Stay Buoyant

But the main reason is the fact that the NFP employment report from the US came in much weaker than expectations. Though the strong wages data brought in some dollar buying immediately after the release of the news, which led to the gold prices weakening towards 1260 during that period, the prices recovered as the market realised that the increase in wages was more due to the hurricanes in the US. This led to dollar selling which has since helped the gold prices to move higher. The weak US data has led to doubts on whether the Fed would hike the rates in December and this is likely to weigh on the dollar in the short term.

Oil prices crashed lower on Friday and the weakness continue as of today morning as well. The prices had been trading comfortably above the $50 region and we had even said that the next target could be the $53 to $55 region but this crash has brought in some uncertainty in the oil markets as the prices trade just above the $49 region as of this writing. We continue to believe in the long and medium term uptrend in the oil prices and would advise the traders to view every correction in the oil prices as an opportunity to go long on the oil contracts.

Silver prices have also recovered since Friday on the back of a weak dollar and now they threaten to break through the $17 region. Their weekly close last Friday has been on a very strong footing and it is likely to keep the bulls interested in the silver market. We expect the prices to continue to trade in a strong manner.