Oil Prices To Correct?

Gold prices have received a small boost today as a general risk-off theme dominates the markets at this point of time. This has come up due to the fact that the Italian referendum over the weekend has led to a No vote which has made the Italian PM resign and cause confusion and turmoil in the Italian politics. This is expected to affect the confidence in the Euro region and the euro in particular and this risk has been dominating the markets since this morning. At such times, funds move from the stock markets towards USD, yen and gold and thats what we have seen as the dollar, yen and gold have strengthened so far, though not by much. Gold has managed to break through above and sits just below 1180 as of this writing. Gold continues to look good for more but any upmove will be limited to 1205 as gold prices will continue to be under pressure in the bear future.

Oil prices continue to shoot up as the effects of the deal announced during the OPEC meeting continues to hold sway over the markets. The oil prices have now tried to break through $52, as we had mentioned in our forecasts, twice now and have been unsuccessful so far. We expect a small correction in the oil prices before they start making their way towards the mid 50s. We also have the meeting between the OPEC and non-OPEC members on December 10 where it is believed that the non-OPEC members would announce their cooperation in the deal that has been worked out and agree to cut production from their side as well. If this happens, this will further fuel the boost that the oil prices have received and will continue to push the prices further higher. We believe that a mid point of $55 would be the correct average value for the oil prices considering the cuts that have been agreed to.

Silver continues to progress silently along with the gold prices. We had mentioned in our earlier forecasts that amidst all the attention being showered on gold and which is causing the gold prices to falter, it could actually be silver that benefits from all this as it makes silent progress due to interest from investors who want an asset to store their funds in. Due to its comparatively low cost, it is possible that it can get the attention of investors with small funds as well and this is why it is important to keep an eye on the silver prices.