Gold price shed more than 5% in February. XAU/USD is currently trading at a good $1,840, which puts it around $40 or 2% higher than on Tuesday. It appears that the yellow metal has bottomed out, strategists at Commmerzbank report.

There is no longer any expectation of rate cuts this year

“Weighing on Gold was a combination of an appreciating USD and sharply rising bond yields due to a massive upward correction of US interest rate expectations.” 

“By the end of the month the expected rate peak had been pushed back into the autumn – what is more, it is now set to total almost 5.5%, which is around 70 bps higher than envisaged at the start of the month. Moreover, there is no longer any expectation of rate cuts this year.”

“The price increase seen this week despite even higher interest rate expectations could indicate that the correction of the gold price is more or less complete and that the price may have bottomed out at the beginning of the week.”