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Gold takes a breather amid risk-on sentiment — TD Securities

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(Kitco News) Gold prices seem to be pausing amid some risk-on sentiment in the marketplace, according to TD Securities. “Risk markets are trading strongly to start the morning on news of promising vaccine results, seeing the yellow metal take a breather,” the bank’s commodity strategists write. Long-term expectations, however, are still positive for gold based on the inflation outlook, the strategists point out. “Any weakness from a risk-on environment should be only a temporary knee-jerk reaction as a vaccine would do well to boost inflation expectations as confidence grows in the economic recovery, leaving real rates trading near their lows, which is a powerful driver of gold prices,” they note. TD Securities adds that there is renewed speculative interest in the gold futures market with positioning levels growing  “substantially in recent weeks.”

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