Gold may find support

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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.


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