Gold prices have been moving higher during the course of the last 24 hours as a combination of weakness in the dollar and the increase in tension in the Korean region has been helping to keep the prices well bid. The prices have made a short sojourn over the 1290 region as of today morning and continue to remain buoyed. The dollar has been weak ever since the NFP data came in last week and it showed that it was nowhere near expectations. This has led to uncertainty in the markets on when the Fed would be able to hike rates the next time. This has also put the Fed on the backfoot as they would have expected the incoming data to improve to make their decision of hiking rates easier.
Gold Moves Higher
Also, over the last 24 hours, we have seen the risk in the Korean region tick higher again as the reports says that the US is considering various options on how to deal with North Korea while there are also reports that say that fighter jets have been flown by the US in the region. This has once again led to an escalation of tension in the region which has pushed the stock markets on the backfoot and these funds have now been diverted into gold which has in turn helped to push the prices higher. The focus for today would be on the FOMC minutes where the market would look for hints from the Fed members on when the next rate hike would be.
Oil prices have shot higher and now trade comfortably above the $51 region as of this writing. The main reason for this move up is due to the fact that the oil inventory data showed a drop in the inventory in the US for the 3rd week in a row. Saudi Arabia also announced that they would stick to their production cut target and a combination of these data events helped to push the oil prices higher and keep our medium term target of $51 alive.
Silver prices have also been buoyant over the last 24 hours, in line with the gold prices and all eyes would be on the FOMC for today as this is likely to determine the short term direction.
This article was originally posted on FX Empire
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