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Gold Prices Weaker, Await Data

By:
Colin First
Updated: Aug 15, 2017, 08:14 UTC

Gold prices continued to trade within a range near the highs of the range for most of the day yesterday but with a bearish bias. There was a brief period

gold

Gold prices continued to trade within a range near the highs of the range for most of the day yesterday but with a bearish bias. There was a brief period of weakness in the gold prices which raised the possibility of a much deeper correction in the prices as it headed below 1280 but it was quickly met by a lot of buying which helped the prices to move back above 1280 but it has since dropped back below 1280 as of this morning and we believe that the gold prices could consolidate in the short term. The prices are near the highs of their yearly range and so if there is a breakout, then there is a good chance that the gold prices could move much higher.

Gold Prices Move Lower

The hint to the short term direction could come as early as today as we look ahead to the retail sales data from the US which is a very important economic parameter apart from the NFP and the CPI data. The dollar bulls would hope that the data comes in stronger than expected which would give them the much needed relief after the general disappointment in the inflation data last Friday. Such strong data would also ensure that the gold prices stay within the range and move lower while a weaker than expected data is likely to push the gold prices through the highs of the range and this breakout would then put the gold prices on their way towards 1300 and further.

Gold Hourly
Gold Hourly

The oil prices struggled during the course of the day yesterday as they seem to be unable to make much progress despite the weakness in the dollar. The supply concerns continue to nag the oil prices and put pressure on it and yesterday, we saw the prices drop towards the $48 region and it briefly threatened to move much lower. On the other hand, we believe that the oil producers are unlikely to allow the oil prices to fall much lower especially due to the fact that they are seeing the positive effects of strong and stable oil prices only now and they would like this to continue longer so that their economy, which is highly dependent on oil, would be able to recover fully.

Silver prices also traded within a tight range, in line with the gold prices and like gold, they are likely to get some short term direction today on the release  of the retail sales data from the US.

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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