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Gold rally halted by Bullard’s comments

FXStreet (Mumbai) - Gold is trading steady today after the hawkish comments from the Federal (Fed) policymaker Bullard capped gains in the Yellow metal.

Bullard’s comments were in stark contrast to the minutes released on Wednesday, which showed that the policymakers were in favor of a “slow lift-off” from the record low e rates. Policymakers were also concerned about the falling inflation expectations and the strength in the US Dollar (USD). However, Bullard said that inflation gauges, if anything, have been rising.

"In my mind, the markets are making a mistake," said Bullard, who is not a voting member on the policy committee, after a St. Louis Fed research conference. "I have been concerned that the market path of interest rates is lagging behind what the committee is thinking." Though a non-voting member, Bullard’s comments killed the “ risk-on” rally generated by the dovish Fed minutes and halted the ascent in Gold prices.

The Yellow metal now trades at 30% lower at USD 221.60/Oz. The weakness in the Equity markets is likely to cap losses in Gold.

Gold Technical levels

Gold has an immediate support of 1216 (5-day moving average), while the immediate resistance is located at 1225.

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