Gold narrow traded Wednesday despite the rise in the value of the dollar that usually moves inversely with commodities. The ECB hiked rates by 25.0 basis points, from record low of 1.0%, accordingly, driving the dollar higher, but the inverse relationship failed to lure investors away from the metal as it continued to trade near the opening levels of $1,459.47 an ounce.
The metal is expected to rise higher as UK’s PPI reports (released at 08:30 GMT) is expected to show price gains over the past period, therefore, traders would hedge against inflation by targeting the metal that is currently in attempt to breach a pivot level at $1,460.00 that would allow it to ascend further to $1,470.0 and $1,480.0 an ounce.
Failing to breach the levels would limit the metal’s trading between $1,445.00 an ounce and $1,460.0 an ounce.
Inflation threats among investors were spread on the hike, while ECB rate hike will help the metal to ascend and touch new historic highs near 1,480.00 an ounce, and probably ascend to 1,500.00.
Nonetheless, with the rate hike, the euro will fall and the dollar will gain, accordingly, limiting the rise of the metal due to the inverse relationship with that joins the dollar with commodities.
Originally posted here
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