There has not been much going on in the commodity markets over the last few weeks as the various instruments and their prices seem to have been caught in a tight range and all that we have been seeing is the prices moving up and down within that range. This is unlikely to bring in any kind of breakout atleast for the short term and hence it is important for the traders to switch to range trading and keep an eye out for a breakout, if and when it comes along. If the breakout does come, it is likely to be a large one, whichever side it might be.
Gold Chops Around
We believe that the best chance for a breakout in the gold prices is likely to come along once the Fed make its rate hike decision in March. It is generally expected across the markets that the Fed would make it first rate hike for the year in March and though we do not expect any kind of surprises from them, what would be of interest would be the accompanying statement which would lay the foundation for the future rate hikes and also help with the timeline for the same as well. This is likely to bring in a lot of volatility in the markets which could lead to a breakout.
The oil prices continue to consolidate and range as well and as we have been saying for many days now, the trend in the prices is over and gone are the days of price rises that used to happen on a continuous basis. Traders now have to be content with small ranges and consolidation.
The silver prices have also been following the gold market in a diligent manner and have been ranging and consolidating between the $16 and the $17 regions over the last few weeks with no signs of a breakout as yet.
This article was originally posted on FX Empire
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