Gold prices recovered during the course of the last 24 hours as the dollar recovery began to sputter and stall during this period. The dollar had been recovering ever since the strong NFP report but doubts still continued on the strength and the longevity of this recovery and the questions were anwered yesterday when the dollar fell hard despite the trigger not being so strong. This shows the inherent weakness in the dollar and how the dollar bears are just waiting for an opportunity to sell the dollar against everything else. The trigger yesterday came from reports and statements that said that Trump’s son had had meetings with the Russians before and after the elections and this only added to the woes of the Trump team.
Gold Recovery Likely to Hit Snag
Though this collusion allegations have been in the public domain for the past few months, everytime a new and a related story emerges, the dollar gets hit hard and we saw the same yesterday when we saw the gold prices recover from the 1210 region to trade just below the 1220 as of this writing. We expect the gold price recovery to stall around the 1220 region for the short term as the gold prices have been affected in recent times not only by the fluctuations in the dollar but also by other factors like interest rates, yields and bonds as well. These factors are unlikely to go away anytime soon and we expect these factors to continue to keep the gold prices under pressure.
Oil prices also recovered yesterday, which is something that we have been saying for quite sometime now. We continue to believe that the lows for oil are in and we expect the oil prices to continue to move up from here. We had also pointed out in our forecast yesterday that the oil prices could be forming a base around the $44 region and that this region would be a good place to go long and thats exactly what happened yesterday as the prices recovered from there and pushed through $45 and trades just below $46 as of this writing. This could be due to the oil inventory data showing a greater draw than expected. Though the inventory data is to be released only today, many large investors get the data through API and this could be a reaction to that.
Silver prices also staged a recovery during the last 24 hours, in line with the gold prices and they trade just below $16 as of this writing. We expect the recovery to stall here and the prices should begin to drop once again.
This article was originally posted on FX Empire