Slow Markets All Round Affects Gold as Well

It was a quiet market all around yesterday and the commodities market was no exception to that. For a large part of the day, the gold price spent their time near the highs of its range around the 1220 region without being able to make up its mind on whether it wanted to break through this or whether it wanted to correct back below. We had mentioned in our forecast yesterday that with the break through the support at around the 1220 region, the gold prices are set to become weaker and this was evident yesterday as well as towards the close of the day, the gold prices corrected lower though it continues in the vicinity of the range high as of this writing.

Gold Prices Continue to be Weak

This only goes to show the tight consolidation and ranging that has been happening in the gold market over the last 24 hours. There was no fundamental trigger to push the price in either direction and this was one of the main reasons for the lack of volatility in the markets. For a brief while, the traders looked towards Yellen to provide some direction in her testimony but she failed to do that as well which made the traders settle down and spend their time trying to day trade and trying to eke out as little as they possibly could.

Oil prices continued to trade in a strong and steady manner, as it has been doing over the past couple of weeks. If it can be remembered, we had mentioned in our forecasts about 2 weeks back that we believe that the low in the oil prices has been set in the short term and with the various oil producing countries wishing that the oil prices to be higher, they are likely to have their way and this would be a clear signal that oil prices would go up. Since that time, the prices have been moving steadily higher and though there have been some corrections in the prices in between, the direction has been pretty clear. It now trades above $46 as of this writing and it is set to continue to trade strongly in the short and medium term as well.

Silver prices also moved towards $16, as expected and then corrected below. This was an expected move as we had mentioned $16 as a key region. The prices spent quite some time near the price region and then corrected below towards the end of the day and is expected to stay weak in the short and medium term with $16 acting as the ceiling.