Gold prices continued to skyrocket and reached as high as the 1320 region before correcting lower during the second half of yesterday as the market is in some sort of a churn as the traders return back from their holidays and await further developments before they choose the next short term direction for gold. It has to be said that it has indeed been a huge move for the gold prices over the last couple of weeks as it has recovered from the mid 1250s to rise and rise during this period and now trades comfortably above the 1300 region. The fact that this move higher has happened without any major fundamentals makes the move all the more remarkable.
Gold Prices Higher
But though it seems like fun for the bulls at this moment, it has to be noted that the new year of trading has just begun and it is only now that the traders have started to return back to their desks after the long holidays, the markets have begun to open in a full fledged manner and the liquidity has started to pick up. The dollar has been on the backfoot over the last couple of weeks and it remains to be seen whether that would be the case as the traders return back to their desks. Later on in the US session, we will be seeing the release of the FOMC meeting minutes from December and it would be interesting to see what the Fed members think about a rate hike in March and also about the market expectation for 3 rates hikes from the Fed this year. If the minutes turn out to be hawkish, then we could see the dollar making a comeback which should place the gold prices under pressure.
Oil prices continued to move within a tight range over the last 24 hours as the prices traded above $60 for much of the day. The return of the liquidity is going to pose a challenge to the bulls and we will have to wait and see whether there would be a correction in the prices as a result.
The silver prices also traded above the $17 region but as we had mentioned in our forecast yesterday, the momentum in the silver prices seems to be lacking and the prices seem to be moving much slower when compared to the gold market. This clearly shows the lack of demand in the silver market which could pose a problem to the traders once the prices start reversing.