Gold Prices Continue Higher

The gold prices rose through the 1260 region during the course of trading yesterday as the dollar weakened across the board. Though the dollar recovered some of its strength late in the US session, the gold markets managed to hold on to their gains and continue to trade above the 1260 region as of this writing. But the prices are likely to face a challenge in this region as there is likely to be a lot of selling in this area. Also, the prices had risen as traders have begun to exercise some caution ahead of the passage of the tax bill in the US. This is the reason why we have been seeing the dollar slide lower over the last 24 hours. The bill is expected to be passed in a day or two.

Gold Likely to Face Selling

When the bill does get passed, we are likely to see the dollar begin to gain in strength as the investors and traders involve in one more round of dollar buying. This is another reason why we do not see the gold prices moving much higher from this region. When the dollar begins to strengthen, we are likely to see the gold prices slide towards the 1250 region. The dollar strengthening due to the passage of the tax bill is also likely to be the cue for the US stock indices to move to all time highs and this is likely to add even more pressure to the gold prices in the short term.

Oil prices continue to chop on either side of the $57 region and as we have been mentioning in many of our forecasts, this is likely to continue to be the case in the short term. We are looking at a period of consolidation and ranging in the oil prices as we head towards the end of the year.

Silver prices have also moved higher, in line with what the gold market has been doing. The prices are clearly above the $16 region but like gold, the silver prices are also likely to face some selling in this region and this move higher is going to be short lived.