Gold Prices Flounder on Hawkish Fed

The gold prices have dipped lower during the last 24 hours on the back of sustained strength in the dollar which has continued to grow since the beginning of the week. We have been seeing the increasing anticipation in the markets over the FOMC meeting minutes which were finally released yesterday. The markets had been in a state of flux ahead of the release of the minutes as the traders were expecting the Fed to give a firm timeline for the future rate hikes. The release of the minutes was followed by a spike higher through the 1330 region as there was some confusion on whether the minutes were hawkish or dovish. But as the time wore on, it became clear that the Fed had been hawkish and it was time for some dollar buying.

Gold Heads Towards $1320

The Fed has indicated that it would be looking at hiking rates more than 3 times during the course of the year. This is something that is certainly hawkish for the dollar and this has pushed the gold market on the backfoot as this is something that we had warned as one of the risks for the gold prices. Of course, all this is dependent on the incoming data and the Fed has also mentioned as much in their minutes as well. This has led the gold prices to slip and now it is in real danger of slipping through the support near the 1320 region and head towards the 1300 region.

The oil prices continue to hover around the $61 region and this is likely to continue in the short term as the market consolidates and awaits the next direction. That direction is unlikely to come anytime soon as the bulls and the bears seem to be happy with where the prices are at this point of time.

The silver prices have managed to sustain their price range for now and have not been rocked as much as the gold prices so far as they continue to trade in the $16.5 region.