Gold prices edged higher in early European trading, building on the positive momentum from the end of last week. After hitting a one-month low on Thursday, following the Federal Reserve's hawkish stance, bullion prices rebounded, supported by haven demand. Geopolitical risks and the ongoing threat of trade wars have driven investors to increase their allocation to refuge assets. However, the upside for gold remains limited. The Federal Reserve is expected to keep interest rates elevated for an extended period as the resilient US economy and renewed inflation concerns stay on the Federal Open Market Committee's radar. In this context, gold prices are likely to remain supported above the $2,600 level heading into the year-end but are unlikely to revisit the highs above $2,700 seen earlier this month.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
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