According to Bank of Nova Scotia’s FX department, the most recent move up in gold prices can largely be attributed to short covering.
Since June 28th, gold has rallied some 17 percent. The kick start to this rally was speculators reversing shorts, or short covering.
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Gold prices are very quiet this morning as investors await FOMC meeting minutes on Wednesday. The other big data point for the US economic recovery this week will be existing and new home sales reported Wednesday and Friday respectively. This will be the first time the data incorporates the most recent spike in US mortgage rates.