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The fundamental battle being fought out in the gold market shifted this week.
Recently, the optimism around COVID vaccines and the adjoining rally in risk assets had weighed on gold. In turn, this sent prices lower as the equities market soared and traders rushed out of safe-haven positions.
This week, however, the dynamic has shifted. While risk assets are still climbing, the main factor driving markets is the heavy selling in the US dollar.
At the December FOMC this week, the Fed essentially put an end to any idea of a USD recovery in the near term. The central bank extended its current $120 billion monthly asset purchases, altering their guidance to say that purchases will now continue until significant economic gains have been made.
Along with the guidance that rates will stay at current levels until at least 2023, the news was firmly bearish for USD.
Additionally, the dollar is coming under pressure from growing expectations that the US administration is close to passing a ne...
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