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June 13, 2016 | 14:50 | Dubai
A contracting bond-yield environment, increased risk adversity hitting stocks combined with the emerging inflation threat from rising food and energy prices are giving precious metals an additional boost. The dollar remains important but clearly not the only driver for metals and ahead of the Brexit vote, we could see this sector remain supported despite headwind from a stronger dollar, says Ole Hansen, Head of Commodity Strategy, Saxo Bank.
Overall, commodities continued their strong ascent with broad-based gains across most sectors with the exception of industrial metals. Towards the end of another strong week, however, some profit taking began to apply some downward selling pressure, Hansen said in his weekly report.
The dollar is back in demand with investors increasingly beginning to worry about the outcome of the June 23 Brexit vote in the UK. The combination of the European Central Bank turning its asset purchase focus towards corporate bonds and safe-haven buying of German government bonds helped high quality yield contract even more.