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FXTM: Gold to remain in demand despite dollar rebound

Kitco News

Gold should continue to draw support despite a recent bounce in the U.S. dollar, said Han Tan, market analyst at FXTM. Markets around the world are largely focused on the economic impact of the coronavirus outbreak, as well as the Russia-OPEC oil-price war. The spot dollar index bottomed Monday at 94.65, the lowest level since September 2018, but since bounced to 96.174 just before 8 a.m. EST. Still, spot gold was $18.30 higher to $1,667.20 an ounce. “Although $1,700 proved unsustainable for gold bulls, the pace at which bullion got to that psychological level suggests that investors’ propensity for risk aversion remains elevated,” Tan said. “Although the dollar’s rebound has taken some of the edge off gold prices, bullion is expected to remain well-supported above its 50-day moving average, as long as fears of a recession weigh on global market sentiment.”

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