The Bulls Drag Gold Upper

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Bulls Drag Gold Higher

According to the Gold, The futures for bullion jumped once again and continued their journey up, breaking once of the important resistances at $1257.

London – The yellow metal booked another set of gains on the back of technical trading, and was trading at its highest since April 12 and preparing ground for further gains by breaking resistances.Contracts for future delivery of the yellow gold traded 0.42% higher at $1,259.70 for a troy ounce, gaining more than 18% since the start of the year.

Gold traders now eagerly await next week’s Federal Open Market Committee (FOMC), which will probably yield no change in the monetary policy of the Federal Reserve, but the statement published after the meeting could be used to predict future steps the Fed might take.

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In a final set of comments before the Fed’s one-week-long communication blackout period, the Boston and New York Fed presidents sounded upbeat about the economic outlook.

“While I believe that gradual federal funds rate increases are absolutely appropriate, I do not see that the risks are so elevated, nor the outlook so pessimistic, as to justify the exceptionally shallow interest rate path currently reflected in financial futures markets,” Boston’s Rosengren said on Monday.

His New York colleague William Dudley, usually a dovish speaker, was similarly optimistic about the US economy, so perhaps a slightly more hawkish statement can be expected, which would increase the bets for a rate hike in June.

The yellow metal and interest rates have an inverse relationship, as higher interest rates make other forms of investment more attractive than the non-yielding bullion, lowering the demand and pushing down the price. If the next FOMC statement is strongly hawkish, one might see a drop in the price of gold.

This story is updated from wbponline.com

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