The gold prices continue to consolidate and range for much of the last 24 hours. There has not been much action in the gold markets over the last few days and even the waxing and waning of the strength in the dollar seems to have had little impact on the gold prices. The prices continue to look buoyant and bullish as the market trades above the $1200 as of this writing but if and when a breakout happens, it is likely to be large. The gold market has been trading within a small range of around $50 over the last several weeks and that is why we wonder whether it is priming itself for a breakout.
Gold Prices Stable
The gold bulls have done well so far on the back of some serious dollar strength as we have seen the support regions hold below the $1200 region. This is a kinf of surprise as the gold prices have been looking weak for long but the bears have not been able to make much of a headway despite the weakness in demand for gold and despite the dollar strength as well. This speaks volumes about how important it is to have some solid fundamentals backing the instrument and we strongly believe that this is the only saving grace for the yellow metal.
The crude prices have dropped off over the last couple of days after threatening to have a breakout on the day before. Just when it seemed as though the bulls would have taken control after the breakout, we have seen the prices fall back through the highs of the range and now the market trades in the $74 region as of this writing. With the oil prices back within the range, we expect the bullish speculators to begin exiting the market as they are unlikely to get a breakout anytime soon. This is likely to add further pressure to the oil prices in the short term.