With the dollar overnight breaking out to the highest level since May 14th, US treasury yields nearing the highest levels of the month and critical US inflation data from the quarterly PCE report to be released tomorrow, traders should expect an expansion of volatility in gold.
Divergence between gold and silver extended yesterday with silver remaining strong, gold showing weak, and silver adding to its recent show of sector leadership.
However, we suspect strength in the dollar and rising global interest rates undermined sentiment and might have prompted some gold longs to exit ahead of tomorrow's US PCE data...[MORE]
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