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Gold Prices Lose Support

Colin First
Updated

Gold prices continued to move lower and it looks as though the 1248 support region has not been able to hold the prices as we had expected it to. With the lack of fundamentals and economic data around the globe yesterday, it was a slow drip lower for the gold prices and this was evident in the way that the prices chopped around for quite sometime before choosing the overall direction to be lower. We expect this choppiness in the prices over the next day or so as the market and the traders wait for all the central bank leaders to come in and have their say on the world stage before they end their stint for the year.

Gold Prices Move Lower

We have the Fed with their rate announcement tomorrow and by all practical looks of it, they are expected to hike rates. This has already been priced into the markets and hence it would not be too much of a surprise if that happens. It is the tone of the statement that will be watched closely to see whether the next rate hikes in 2018 would be. This is what the market is concerned about at the moment and the actual hike this month is going to be secondary news to this. Then we have the ECB and the BOE later in the week and all these events should determine the overall direction of the market for the next couple of weeks as we enter into the end phase of the year.

Gold Hourly
Gold Hourly

The oil prices moved higher through the $58 region though there were no specific fundamentals driving the prices higher. It looks as though it is going to be only a matter of time before the oil prices reach the $60 region and it would not be a surprise if that happens before the end of the year.

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Silver prices are also under pressure from various quarters as the concept of safe havens takes a beating and we are seeing more and more funds being moved in search of better returns. Gold and silver are likely to be the most hit due to this exodus of funds.

This article was originally posted on FX Empire

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