Gold prices shot higher on the back of dollar weakness yesterday and they pushed through the 1250 region and trade comfortably above that, as of this writing. After having looked quite weak over the last few weeks, it has been a great comeback from the gold market over the last 24 hours and with the bitcoin market stalling, we might see some of the funds returning back to the gold market in the short term. The dollar weakened across the board yesterday on the back of the Fed rate announcement and statement. We had indicated that this could have an impact on the gold market and this has proven to be right again. The Fed did hike rates but the accompanying statement was not as hawkish as the market had expected it to be.
Gold Likely to Remain Buoyed
The Fed had 2 dissenters among its members for the rate hike and its outlook for inflation was also dovish. This led to some uncertainty on future rate hikes and it seems that the rate hikes in 2018 but be more delayed than what was expected. This led to some dollar selling which picked up pace as time wore on and this helped the gold prices to recover. Also, over the last couple of weeks, we had seen the bitcoin market hog all the headlines and this had led to some funds being moved out of the gold market and into bitcoins. But with the bitcoin prices now stalling for the past few days, we could see seeing some of the funds returning back and this could also be a reason for the demand and the prices increasing in the coming days.
Oil prices continued to move lower during the course of trading yesterday and it looks as though it would only be a matter of time before the region around $55 would be under threat. This region has been one of strong support over the last few weeks and we expect it to continue to hold the prices for now as the market braces itself for the next challenge that is likely to lead to a bounce in the oil prices towards $60 and beyond.
Silver prices have also rebounded over the last 24 hours as the prices have pushed through the $16 region during this period and it looks as though the recovery might continue in the short term, in line with what is happening in the gold markets.