Gold Prices Continue to Consolidate at Highs

Yesterday we saw the dollar go lower across the board, falling against almost all the instruments. It was the same case with gold as well as the dollar fell against gold and the gold prices moved towards the highs of its range. But we would have expected a much larger push in the gold prices through the 1345 region and towards the previous highs at around 1360 but so far, that has not happened. The market seems to be waiting in anticipation of further data from the US before deciding which way it wants to move and that is the reason for some choppy action near the highs over the last couple of days. This is likely to get sorted out when the NFP data gets released from the US later today.

Gold Prices Await NFP

This piece of data is likely to be very important in the larger scheme of things as far as the dollar is concerned. The dollar has been battered over the last month or so as the expectations of the market have been minimal. But with the data improving over the last couple of weeks, it looks as though we might see a bounce in the dollar pretty soon. But for that to happen, it is important that the economic data keeps pace with what the Fed is thinking. The market is already in the process of pricing in 3 rate hikes from the Fed for this year and it would hope that some good incoming data would push the Fed into making 4 rate hikes. But for that to happen, the employment data in the form of NFP needs to be very strong and the dollar bulls would be hoping that it happens.

The oil prices have also made use of the weakness in the dollar and have pushed through the $65 region and now trade very close to the $66 region as of this writing. It looks as though the uptrend has resumed once again and it remains to be seen what kind of an impact, the NFP data later in the day would have.

The silver prices continue to consolidate for the last 24 hours and this seems to have become a pattern. They do not seem to be as volatile as the gold markets and we should see them coming under pressure if and when the tide turns.