Gold Eases On Dollar Recovery, But We Stay Long
• Gold eased from three-week highs today as a recovery in the USD prompted some buyers to cash in gains after the previous day's sharp rally, though the outlook for Fed interest rates offered support.
• The metal surged 1.5% on Wednesday after below-consensus US payrolls data and dovish comments from Janet Yellen dampened expectations of an imminent rate hike.
• Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
• Investors have almost priced out the chance of a rate increase at the Fed Reserve's June 14-15 policy review and reduced the likelihood of a July increase to about 26%
• We stay XAUUSD long for 1280.00
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• The metal surged 1.5% on Wednesday after below-consensus US payrolls data and dovish comments from Janet Yellen dampened expectations of an imminent rate hike.
• Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced.
• Investors have almost priced out the chance of a rate increase at the Fed Reserve's June 14-15 policy review and reduced the likelihood of a July increase to about 26%
• We stay XAUUSD long for 1280.00
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