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Mini gold rally wont last
Published on 10.10.2017 14:15

After hitting a low of $1,260 3 days ago, the gold price has rallied nearly $30 to be trading around $1,289 today and some are predicting that the rally is about to end.

Comments by US president Donald Trump over the weekend that only action and not talk will end North Korea’s nuclear ambitions helped support the precious metal but many believe the comments were an empty threat and wont amount to anything more.

The market is also now pricing a 90 percent chance that the US Federal Reserve will lift interest rates next year which will most likely see investors exiting gold for the US dollar on the back of higher yields.

"We still reiterate our view that the precious metal will likely remain under pressure over the short-term, as we see a firmer dollar, resilient equity markets, rising interest rates and slightly quieter geopolitical conditions, all combining to keep serious rallies in check," said INTL FCStone analyst Edward Meir

Tomorrows minutes meeting from the US Federal Reserve may show whether the Fed does in fact plan to lift interest rates in December and the gold price is likely to react accordingly

The material published in on this page is produced by the FIBO group companies, and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC; furthermore it has not been prepared in accordance with legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

Andrew Masters

Analyst

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