Gold Prices Move Lower on Dollar Strength

The gold prices crashed lower during the course of trading yesterday but they still trade within the larger range as we had mentioned yesterday. We had also specified in our forecast yesterday of how the gold prices are likely to be more bearish rather than bullish and this has turned out to be true once again. The gold prices are under the mercy of the dollar and the strength of the dollar has been waxing and waning over the past few weeks which has had a lot of impact on the prices of gold. All along, we had mentioned that the dollar is likely to grow in strength in the medium term and thats what we have been seeing. The trigger for the latest round of dollar strength came from the testimony of the news Fed Chief Powell.

Gold Prices Move Towards Range Lows

It was the first time that Powell testified at Capitol Hill and in that, he mentioned confidence in the US economy that it was on the right path and he also said that he would use the existing tools to ensure that the monetary policy was in line with the economic growth. He also sought to allay fears that there was an economic slowdown around the corner and overall, the speech was quite hawkish and something that the dollar bulls were expecting. This led to a large round of dollar buying which pushed the gold prices towards the lows of its range and this is likely to continue to be weak in the coming days.

Oil prices corrected lower on the back of dollar strength but the move lower was slow and steady and largely within range. There is no danger to the bull run in the oil prices as yet and even if there is a correction, we believe that it would run only for a small amount of time and that correction would be of small size only. As we have been mentioning many times before, the oil prices are likely to consolidate in this region for the medium term.

Silver prices also traded lower over the last 24 hours and the impact of the stronger dollar has not spared the silver market as well as it trades below the $16.5 region trying to make its way towards the $16 region.