Gold Prices Sink Lower

Gold prices have begun the next leg of their downward journey as the dollar continues to strengthen all across the board. The gold prices had got a brief respite on the day before as the correction in the dollar rebound helped the prices to recover a bit and move towards the 1280 region. But, as we have been mentioning in many of our forecasts, any rebound in the gold prices are likely to be seen as an opportunity to sell and likewise, the move into the 1280 region was heavily sold into and this led the gold prices lower and it now trades below the 1270 region as of this writing. The move down was helped by the strength of the dollar which was boosted by the strong factory orders data. The economic data from the US so far this week has been quite strong and this has raised the hopes of the market for a strong employment report.

Gold Prices Hit by Strong Dollar

Along with the employment report, we will also be seeing the wages report as well and a combination of these is expected to boost the dollar even further. On the other hand, if the data comes in weaker, we would be seeing a bounce in the gold prices but once again, we believe that it will only be an opportunity to sell gold and hence the bounce is likely to be short lived. All eyes are on the data later in the US session and till then, we have to interpret the market moves with a pinch of salt.

The oil prices recovered from the low $50 region and has since pushed through towards the $51 region over the last 24 hours. This recovery is likely to continue in the short term as we continue to maintain the medium term target as $55 for the oil contracts. Though there has not been many fundamentals driving the prices at this point of time, we can expect the oil prices to continue to remain buoyed in the short and medium term as the OPEC is determined to keep it that way.

Silver prices have managed to hold fairly steady over the last 24 hours, unlike the gold prices which have been sinking lower. But this is likely to be only temporary as it is only a matter of time before the silver prices join gold in moving lower.