Gold has broken a 7 day losing streak today on the back of US dollar weakness after a round of disappointing data from America.
The U.S. producer price index for October hit the market unchanged, and below expectations for a figure of 0.3 percent which many believe shows that inflation is under control and the US Federal reserve may not have to move to aggressively on interest rates
Charalambos Pissouros, senior analyst at IronFX Global noted that even if the Fed raises rates in December the gold price could rally as it already priced into the market,
“That rate increase has been likely fully discounted by the gold market. This whole discussion now suggests that the December rate increase would be a ‘sell on the rumor, buy on the news’ event.”
Some are also predicting that some of Trumps planned polices are going to cause inflation to move higher which in the past has usually been supportive to the gold price as investors look for a safe haven
“We still think that some of his policies are inflationary and that would not be bad for gold,” a traditional inflation hedge, says Ms. Gambarini of Capital Economics.
“Markets (or risk assets are being too optimistic based on the basis of a couple of speeches since he became president-elect.” she added.
Risk warning: Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, your level of experience and preparation of taking risk. The possibility exists that you could sustain a loss of some or of all of your initial investments and therefore you should not risk more than you are prepared to lose. Please seek independent financial advice if necessary.
|By clicking "Continue" you will be redirected to the website operated by FIBO Group, LTD company registered in BVI and regulated by FSC. Please familiarize yourself with the Customer Agreement through the link. Click "Cancel" to remain on this page.|