Gold staged a goodish rebound from eight-month lows touched earlier on Tuesday and finally settled with modest gains for the first time in six sessions. Given that the recent violent selloff in the US bond market has eased, slightly oversold conditions on short-term charts turned out to be one of the key factors that prompted some short-covering around the non-yielding yellow metal.
The US Treasury bond yields have been a key focal point in recent weeks amid the prospects for a faster US economic recovery from the pandemic. The upbeat US economic outlook was supported by the impressive pace of COVID-19 vaccinations and the progress on the US President Joe Biden’s proposed $1.9 trillion relief package. The reflation trade forced investors to price in a possible uptick in inflation and raised doubts that the Fed would retain ultra-low interest rates for a longer period. Read more…
Gold Price Analysis: XAU/USD slides below $1730 level, erases Tuesday’s modest gains
Gold witnessed some selling during the early European session and refreshed daily lows, around the $1727 region in the last hour.
The precious metal failed to capitalize on the previous day’s goodish rebound from multi-month lows, instead met with some fresh supply on Wednesday and was pressured by a combination of factors. The upbeat global economic outlook remained supportive of the underlying bullish tone in the financial market. This was evident from a fresh leg up in the equity markets, which undermined demand for the safe-haven XAU/USD.
Gold Price Analysis: Fitch raises 2021 XAU/USD price forecast from $1400 to $1600
The US-based ratings agency, Fitch Ratings, announced upward revisions to its gold price forecast for 2021 and 2022, in its updated outlook.
Key takeaways: “Fitch Ratings has revised some of its metals and mining price assumptions as prices for many commodities will benefit in the short term from returning demand while the supply response remains slow and inventories are running low.” “Fitch has increased its price forecast for 2021 from $1,400 to $1,600 an ounce.“
Credit: FX Street