Gold Prices Correct Lower and Looking Still Lower

Gold prices continued to correct lower in a slow and steady manner on Friday as well as the risk sentiment continue to improved all across the globe. The North Korean missile tests seem to be having lesser and lesser effect on the markets of late and this was seen On Thursday as well as a jump up on the gold prices due to the tests was quickly followed by a correction and return back to the orginal prices in due course of time. During the previous times, the general risk sentiment added to the North Korean risks as well and had the markets spooked but as the time goes on, the threat from North Korea has less of an effect though it refuses to go away. There is still a large threat in that region but for now, the situation seems to have been managed well and the world goes about its business.

Gold Prices Looking below 1300

This has led to pressure on the gold prices which had mainly risen on the back of increased global risks. With that sentiment taken away and with the dollar also becoming more steady in the short term, the gold prices are on the backfoot and are likely to correct even further in the short term. We are at an important support region just below the 1320 region as of this writing but once this region gives way, we should see the gold prices moving back towards 1300 and below as well. This is certainly possible as the dollar seems to be gaining ground slowly across the board through the recovery has not become full fledged as yet as the markets await the FOMC.

Oil prices continued to trade in a very strong manner, as we have been mentioning over several of our forecasts. We have been firmly bullish on the oil prices over the last couple of months, ever since it became clear that the OPEC members would make sure that they do everything possible to push the oil prices higher. Hence, we have been bullish on the oil prices since its lows in the $43 region and have advised traders to stay bullish even during periods of correction as well. It now trades clearly above the $50 region though the medium term target continues to be $55 and higher.

Silver prices have also been correcting lower over the last few days, following the trend in the gold prices and it now trades just above the $17.5 region. Like gold, silver also continues to remain weak and this is likely to remain so in the short term.