Bell FX, IG Markets Currency Outlook: The Australian dollar is higher and investors are taking advantage of the gold price skids while overseas share markets bounce back from heavy losses yesterday, analysts said.

Australia. This morning the local unit was trading at USD 103.91, up nearly USD 0.20 from yesterday. After two days of fierce selling in the precious metals (and to a lesser extent the currency markets), the Aussie dollar bounced back last night with recoveries seen across all markets, says IG Markets analyst Rebecca Leanne.

She adds that commodities, US equities, bond yields and the currency markets all rallied on a night that was still coming to terms with the horrific events at the finish of the iconic Boston Marathon.

Gold, on the other hand, found support at the 1350 level as central banks and major investment houses publicly stated that the current price is a buying opportunity, notes IG Markets strategist Mr. Evan Lucas.

"This is unsurprising considering the plunge gold has experienced over the past 48 hours; it is now at a level not seen since February 2011 and has well and truly broken the bull run of the last nine years. However, the gold bulls have started to arc up over the last 48 hours as they find little pieces of data to suggest gold has experienced a glitch, and will reverse," he adds.

Mr. Lucas says that he has "no doubt that gold will return to higher levels in the future - inflation looks like being the winner over deflation on a medium- to longer-term view, as the three major central banks expand their balance sheets."

"However, on a short to interim view, it is still in a bear market, and with the US dollar becoming an investment currency, and markets starting to show signs of investment pick-up, a value-store is not a place most traders will find attractive," he explains.

Majors: There was pretty solid data out of the US, and a bounce in the gold price underscored a broad improvement in market conditions. US stocks rebounded on the back of strong earnings results and better-than-expected housing starts, rising 7.0% m/m and are at their highest level since June 2008, while industrial production in March was also stronger than expected, Bell FX's Ms Leanne adds.

Stocks also received support from dovish comments from NY Fed Chairman Dudley and a 0.20% fall in March CPI (to 1.50% y/y),
which suggest that ultra-accommodative monetary policy will stay in place for some time.

For the local stock markets, Mr. Lucas predicted that there would be some profit-taking today that may cause some momentary drop in values.
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For latest pricing, ranges, visit www.bellpotter.com.au, www.igmarkets.com