Gold Recovers But Upside Capped
BonTradeGold found some footing above 1410 level and recovers mildly today, following return of risk appetite. However, the strength of recover is so far weak. Recent hawkish comments from ECB and Fed both lessened gold's appeal as hedge to inflation. ECB is widely expected to raise rates in April by 25 bps. Meanwhile, Trichet's comments this week, which he noted that inflation is "durably" above price stability level, triggered some speculation that April's hike won't be a one-off event. Meanwhile, Comments from Fed Plosser and Bullard raised some possibility that Fed could start normalizing policies earlier than expected. Technically, despite making new record high against dollar at 1448.6 last week, momentum is rather unconvincing for the moment. And any rebound might be capped by this 1448.6 level in near term.
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Gold Recovers But Upside Capped
