It’s Now or Never in The OPEC Meet Today

Gold prices continue to consolidate with a mild bullish bias in line with the general dollar weakness in the markets. Some instruments seem to have made full use of this dollar weakness while others are yet to react fully to the weakness and gold is one of those as it trades in a tight range. If the dollar weakness continues for the next few days, we should be looking at 1205-1210 as the first target and the price action there should tell us the next direction. But with the Fed meeting only a couple of weeks away and with the expectation that they will raise rates during this meeting, we can expect gold to trade in a subdued manner for the next few weeks atleast (unless the Fed throws a surprise) and we do not expect any jumps in the gold prices in the near future. Looking ahead to today, we have the ADP data from the US which will act as an indicator to the NFP on Friday and if it comes out weak, then we can expect the USD weakness to continue for today.

The attention has all been on oil though. For the past 24 hours, as we had mentioned in our forecasts, we have been getting headline after headline from the various meetings surrounding the OPEC meeting today and they have all been pointing to a lot of disagreements. The crux is that Iraq and Iran are not ready to agree for any production cuts and this is likely to greatly affect the possibility of a deal emerging from the meeting today. This has also ruled out the possibility of any use and long-term deal on cuts and oil prices and even if we get a bounce in the oil prices today due to some quickly made-up deal, we expect that move to be sold into and the prices of oil to continue to correct in the future as well. Markets are smart enough to see through any short cuts and so, expect a lot of volatility in oil prices for today and watch out for any kind of specific deals that might be announced once the meeting gets over.

Like gold, silver continues to trade with a tight range expecting some direction from somewhere so that it can make its next move. It has been closely following gold prices over the past few weeks and based on that, we can expect silver to continue to consolidate with a bullish bias. Any upmove should be limited by the resistance at 18.00.