Oil Recovers as Global Fears Recede

Gold prices continued to gain for one more day as the dollar weakened all across the board and this helped to push the gold prices towards 1200. We have been mentioning in our forecasts that once the gold prices reached 1180, it was a foregone conclusion that it would reach 1200 as well and that it was important that the traders watch the price action in this region to see if the gold prices will continue to build or whether there will be a correction. We also mentioned that 1200 would be a tough region for the gold prices to crack for now and so we might witness some correction here. We are now in that region and in that window and the dollar has been very much on the backfoot since the Trump press conference where he failed to deliver anything substantial. It does look as though the bulls have the upper hand at this point of time and we will have to wait and see how the dollar holds up today to determine the next direction in the short term. If the dollar index fails to hold up today and continues to weaken across the board, then we might well see the gold prices shoot up even further and then we are likely to enter into a bull phase in gold prices in the short and medium term as well. It is important for the bears to regain control at this point if they want to have any kind of chance of pushing the gold prices down.

Oil prices recovered a bit yesterday as the global fears over the implementation of the production cut began to subside though the data related to oil inventory still does not show any major reduction in the supply of oil. The recovery in oil prices was also partially helped by the weakening of the dollar index but it remains to be seen how the oil prices would hold up if and when the dollar strength returns. It is important for the implementation of the cut to proceed without any major issues and its equally important that the data also supports it, for the oil prices to have any chance of making further progress.

Silver prices also picked up steam and continued to move higher, following the footsteps of gold and it is likely to follow the same pattern of following gold prices in the short term.