Lower-than-expected inflation in the US is putting downward pressure on the dollar. This, coupled with lower real yields, is allowing gold to retest $1,800, bank economists report ANZ.
No strategic gold ETF purchases have emerged
“Reversing inflation in the US triggered a sell-off in the dollar, which in turn supported the price of gold. Benchmark US real yields are also stabilizing from their recent highs, lowering “Opportunity costs. That said, inflation remains well above the Federal Reserve’s 2% target, making it hard to expect the Fed to be dovish any time soon.”
“Short-covering of investor positions has been driving the gold price up, but strategic positioning of ETF holdings has not been strong.”
“Physical demand is weakening, as seen in the receding spot premium since October, but official purchases are holding up.”
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
