Gold prices moved lower over the last 24 hours on the back of a recovery in the dollar strength all across the board. The prices now trade in the 1320 support region and a break of the price through this region could well open up 1296 in the short term. The gold prices have been suffering a double whammy as we are seeing a recovery in the dollar strength and also a recovery in the stock markets as well and a combination of these events has been placing the gold prices under a lot of pressure since the beginning of the week. The prices had been rising over the last couple of weeks on the back of increased risk from North Korea, the dollar weakness and also due to the weakness in the stock markets.
Gold Likely to Weaken Further
These led to the funds being moved out of stock markets and into safe havens like gold and silver. But with the tension in the Korean region abating, we are seeing the stock markets recover globally and this has led to a reverse flow of funds out of gold and back into the stock markets. The dollar also staged a recovery of sorts yesterday as reports of Trump reaching out to the opposition to get his reform bills through has brought cheer to the dollar bulls and they showed their appreciation by buying more of the dollar and this has led to the crashing of gold prices lower and now the markets wait for the CPI data from the US later in the day which is likely to determine the short term direction of the gold prices.
Oil prices broke through their consolidation range and pushed higher during the course of the day yesterday as the prices rose through $49 and are now targeting the $50 region. This has happened despite the recovery in the dollar strength and this is something that we have been saying, would happen over the last few days. With the hurricanes over, the supply and the demand are being restored to their normal levels and this has helped the oil prices to recover over the last couple of days and the prices are expected to be buoyant in the short term.
Silver prices have also moved lower during the course of the last 24 hours though the fall has not been as severe as it has been in gold. This is likely to now consolidate and range till the release of the CPI data from the US later in the day.
This article was originally posted on FX Empire
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