Another painful stumble for gold
Gold has given up overnight gains as the rebound from Wednesday’s slide was short-lived.
The culprit for the latest gold dive was the Fed, who’s reluctance to get on board with yield curve control jolted yields higher, in turn dragging the dollar off its lows.
This came on top of the central bank raising concerns about considerable risks to the economic outlook and slightly amending its language on the prospect of more forward guidance on rates.
I don’t see this as a big shift from the Fed so the moves may not last but it is another reminder of the vulnerability of precious metals despite being on such a stong run, more generally. Gold and silver both fell around 3.5% and looks susceptible to further corrections.
The outlook remains bullish in both cases, with the dollar having broken through important support this week and central banks unlikely to even consider tightening or a considerable period of time.
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