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Gold Resumes Downtrend After Dead-Cat Bounce

Commentaries & Views

(Kitco News) - Traders hoping for a sustained bounce off the $1,220 support line were met with continued selling throughout the Asian and early European markets. It is beginning to feel like a capitulation event but we prefer to await the options expiries tomorrow. From these current levels, it will not be difficult to test the $1,200 strikes, but here, we would suggest a more robust bounce should be expected. The stronger dollar and sheer frustration and resignation on the part of the bulls continue to be the primary driver for lower prices. Physical buying has increased noticeably in gold and should silver find the $14 handle, we expect volumes to accelerate for the white metal, with increased premiums for physical product as surpluses dry up. The $1,220 area now becomes first resistance for gold. We see some support at $1,207 and then the $1,200 figure.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.

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