Gold prices have rebounded since the poor US payroll data for May came out last week. They are now close to a one-year high around $1,300 an ounce. The jobs report made an imminent interest-rate rise by the US Federal Reserve far less likely. Rising rates make gold, which pays no yield, less attractive, so a delay is good news for the yellow metal. A broader point is that higher interest rates are a sign that the economy is returning to normal, which bodes ill for an asset that thrives on bad news.
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Bank of England holds interest rates at 5.25%
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