Commerzbank analyse the current pressure gold is facing
(Kitco News) - Commerzbank commodities analyst Daniel Briesemann has written an article pointing out that the yellow metal still remains under pressure. He noted, "Gold once again found itself under pressure for quite some time yesterday and dipped at its lowest point below $1,780 per troy ounce."
He added "In our opinion, the main factor weighing on its price was the persistently firm US dollar: for the first time since the middle of last year, the EUR-USD exchange rate slid below the 1.12 mark for a time. It was not until late trading that gold recouped its losses, and it is trading this morning at a good $1,790. Gold in euro terms is priced at around €1,600 per troy ounce again. The moderate fall in bond yields probably contributed to the slight recovery."
When it comes to investment flow Briesemann noted "Interestingly, ETF investors took advantage of the price slide in recent days to build up their holdings: since last Friday, the gold ETFs tracked by Bloomberg have registered inflows of 16 tons (even if yesterday saw a marginal outflow). The SPDR Gold Trust accounted for most of the inflows."
Lastly, Briesemann spoke about Fed policy and said "as anticipated, the minutes of the most recent Fed meeting on 2/3 November brought no new insights. After all, Fed Chair Powell had already announced at the subsequent press conference that so-called tapering would begin. All that the minutes revealed was that the FOMC members are in favor of normalizing monetary policy more quickly in view of the high inflation. This had been emphasized again by various Fed representatives themselves in speeches and interviews in recent days"