Gold Prices Crash Lower

The gold prices crashed through the support region around the 1325 region on the back of some serious dollar strength and now this exposes the price to further correction in the coming days. It is likely to be choppy and volatile in the short term as the bulls battle for control. The dollar continued to rebound as the investors and traders increasingly suspect that the dollar is being kept low on purpose. The US have started to face some flak for trying to do so and that is also one of the reasons why we are seeing the dollar move up. Of course, the incoming data has been very helpful as it presents a pretty picture of the US economy.

Dollar Picks Up Strength

This has helped to make some of the decisions easier for the Fed including the one to make further rate hikes in the coming months. Add to this, we have the low demand for gold in general and also the fact that the prices have risen over the last couple of months on low volume and we have all the ingredients for the fall that we have been seeing over the last couple of weeks in the gold prices. We will have to see whether this break through the support region would bring in additional losses in the short term as we have various supports below but it would not be a surprise to see any such losses as the dollar is expected to continue to gain in the short and medium term due to the rate hikes from the Fed.

The oil prices continued to move lower and broke through the $62 region and trade near the range lows as of this writing. The inventory data from the US showed a greater build up than what was expected and this led the oil prices lower but we believe that the oil prices would begin to form a base in this region and should range between the $60 and $70 regions.

The silver prices also dropped through, in line with the gold market and it is expected to continue to be weak in the short term.