Gold Prices Crash Lower

The gold prices continue to crash lower over the last 24 hours as the prices slid towards the 1230 mark after the support in the 1248 region had been broken on the day before. We had pointed to the break of support in our forecast yesterday and on cue, the prices have since slid. The latest move lower was caused by the strength of the dollar which came in as the anticipation of the Fed move and the tax reform bill grows. The market has priced in a rate hike from the Fed today and it remains to be seen whether the Fed would fulfill their expectations. But the risk is to the upside for gold prices as any kind of slight dovishness from the Fed could push the dollar on the backfoot.

Prices Unlikely to Get Any Respite

There is also increasing anticipation over the tax reform bill which is expected to get passed through the Senate anytime over the short term and if and when that happens, we can expect the dollar to gain in strength and this should keep the gold prices under pressure.In fact, for over a month now, we have been mentioning in our forecasts that with the change in the policies of the central banks to begin hiking rates, the gold prices would continue to move lower in this large cycle.

Oil prices continue to chop around as they fell yesterday and over the last couple of weeks, the prices do not seem to have any specific direction. One thing is clear though, and that is the fact that the prices are in the hold of the bulls and hence likely to move higher in the short and medium term as well. The support region at around $55 has proven to be very strong over the last couple of months and this is likely to be so.

Silver prices also continue to trade in a weak manner and when the gold market cannot break through the large weakening cycle, the silver market does not stand any chance at all.