Why Gold is Extending Its Losses?

Why Gold Is Extending Its Losses?

Fed May Rise The Rates ?, Posted on May 25, 2015

Fed raising the rates is certainly not a electrifying news for the precious metal, which is on track to extend its biggest weekly decline since April. Janet Yellen last week has confirmed that she is still confident that the rates will rise this year and traders are surely not fond of this news at all, because so far the rally was fuelled by the optimism that the economic data is still very fragile and we are not seeing any brawny economic prints and this will keep the interest rate hikes pressed.

Yes, the June rate hike is not on the table, which is providing a lifeline for the bulls and September rate hike is also in question, if the economic data stays this way.

In terms of Greece, traders are not paying much attention to the headline that the country will not be able to pay its debt on time- this is a serious concern which is not gaining much attention. The fact is that if Greece does not pay its debt to the IMF on time, this does not trigger a default straight away as the IMF rule stipulate that it will be a while before the IMF actually consider this as a default. Even then, this does not mean that the country will be pushed of the Eurozone and this is because if Greece can maintain its liquidity- currently through ELA process, it will remain in the Eurozone.


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