Gold has made a comeback over the last week hovering on the brink of $1,300 an ounce supported by dovish comments by Federal Reserve Chairman Ben Bernanke and a sharp decline in the U.S. dollar.
Does the recent rally in the precious metal – that has gained almost 6 percent over the past week – signal that tapering is further off than initially anticipated?
“The price action in gold led the expectations of U.S. tapering. Gold broke down below important levels many weeks before U.S. yields started to rise and the taper talk became widespread,” said Dhiren Sarin, chief technical strategist at Barclays.
“The fact that gold is now rebounding is a suggestion that some expectations of tapering are fading away,” Sarin said, adding that the close last week on Friday was an encouraging sign that gold is gaining some momentum.
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