The gold prices continued to hover below the 1325 region as the bulls are finding it hard to string together a decent run higher on the back of some solid dollar strength. We believe that the dollar strength would be put to the test during the course of this week as the dollar would have a string of important data being released from the US during this period. This includes the retail sales and the inflation data and the dollar strength if likely to come under pressure due to this. The dollar has been rising over the last few weeks on the back of some consistently good data during this period and this has helped to make the decisions of the Fed easier.
Gold Eyes Another Leg Higher
Now that a rate hike in March is almost confirmed, the market has begun to focus on further rate hikes later in the year and for that to happen, the data has to be good and strong in a consistent manner. This placed a lot of pressure on the dollar already as it now has to deliver in the form of strong data and failure to do so could risk a weakness in the dollar which might exactly be what the gold bulls would need to push the prices higher in due course of time. Of course, the move higher isn not going to be easy as the dollar strength is likely to stay in the medium and long term.
The oil prices has pushed lower through the $60 region and threatened a large break lower but have since bounced back during the course of the day. This probably constitutes one of the largest corrections during the uptrend period over the last few months and presents a challenge to the oil bulls.But as we have said consistently over the last few months, we believe that the price region between $60 and $70 should keep the bulls and the bears comfortable and thats where we are now and hence we do not expect any major moves in the market in the short term.
The silver prices continue to flounder on either side of the $16.5 region and this is the tone of the price action that we are going to see in the coming days as well as the silver market tries hard to find a bid.
This article was originally posted on FX Empire
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