Gold is holding up surprisingly well given the hawkish rhetoric from central bankers both in Europe and the US that point to further interest rate rises still to come.
The fact that gold is still able to trade above $1,950 an ounce, a level that remains very high from a historical perspective, demonstrates that investors still remain cautious and reluctant to fully commit to a risk on trading attitude.
Gold’s safe haven appeal may have dimmed slightly since the US banking crisis of March but concerns over the prospect of central banks’ aggressive stance to tackle persistently high inflation tipping economies into recession have kept gold supported.
Gold’s high for the year may be behind it but it looks like the slide towards $1,900 an ounce will be a slow one with plenty of underlying support remaining.
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