December Gold futures showed surprising strength, rallying from an intraday low of $3,997.40 to close essentially unchanged, despite being down for most of the morning session. Central bank purchases of gold are likely to continue as de-dollarization surfaces as a recurring theme in global reserve management, with central banks diversifying their holdings away from U.S. dollars. Treasury yields are beginning to react to the sell-off in risk assets, which is helping to keep a floor under Gold futures. A drop of 3 to 4 basis points was observed across the short to medium end of the U.S. yield curve, with this flight to safety behavior supporting the metal.
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