Day four: our gold trade

Gold has come off its lows helped by some dovish comments by incoming Fed chair Janet Yellen.

However, I remain happy to maintain a bearish tone on the previous metal heading into the testimony. The question now is whether Yellen can survive the wave of criticism the Fed’s bond-buying programme is likely to face from politicians. She will really have to justify maintaining the programme at the current pace as the Fed’s balance sheet blows out to $4 trillion.

As a result, Yellen might actually play the fence to an extent in a bid to keep everyone happy. Should Yellen come in less dovish than the market is now positioned for, then gold is likely to reverse lower.

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.