Gold prices continued to rise in line with the weakening of the dollar across the board. Gold has been one of the main instruments that has been utilising the weakness in the dollar, seen over the past couple of months as a correction of its strength towards the end of last year, and has managed to move steadily higher during the same period with very little correction, if any.
Is There More to Come for Gold
Which brings us to the question of when this kind of move is going to end, if at all. We have been believing that the dollar strength is likely to return sooner or later and especially with the Fed making it clear that it is looking at three rate hikes for the year, the one instrument that is likely to be most affected if and when the rate hikes kick in, would be gold. But the effect of these rate hikes on gold prices would be compensated or balanced to some extend by the fears and risks surrounding the Trump administration which is likely to continue to remain in the background for the short and medium term as well. This kind of an eerie feeling about his team is unlikely to go away anytime soon and hence, this is going to keep the gold prices afloat even when they would be affected by the rate hikes by the Fed. We believe that once the gold prices manage to clear the resistance around the 1240 region, we could well be on way to 1270 as a short term target before we see any kind of a decent correction.
Oil Continues Its Consolidation
Oil prices have not been doing much ever since the beginning of the year and that is unlikely to change anytime soon as well. Oil bulls have been unable to force a breakthrough as the fundamentals, in the form of a rising oil inventory from North America, continue to put pressure on the oil prices and it remains to be seen on how long this kind of a stalemate can continue.
Silver prices managed to pierce through 18.00 and it trades just above this figure as of this writing and as in gold, we expect the silver prices also to remain buoyant during the short term and maybe make good progress along with the gold prices as the pressure on gold continues to exist.