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Bannockburn: 200-day average key chart point for gold prices

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A key for gold prices on the technical charts will be whether the metal can close back above the 200-day moving average just over $1,500 an ounce, said Bannockburn Global Forex. As of 7:40 a.m. EDT, spot metal was down $4.60 to $1,494.20 an ounce. It had hit a seven-year high just above $1,700 back on March 9. “Some gold sales [since] were linked to the need to raise cash in part to meet margin calls elsewhere,” Bannockburn said. “Other links include some participants borrowed dollars to buy gold, and as the structure was unwound, gold, which was treated like any other asset, was liquidated.” The metal appeared to be trying to form a base around the $1,450 level last week, Bannockburn said. A couple of technical indicators – Moving Average Convergence Divergence and Slow Stochastic – have flattened out but have yet to turn higher, Bannockburn said. “A close back above the 200-day moving average (~$1503) would help the tone,” analysts added. “If a near-term bottom is in place, then the first corrective targets are seen near $1,544 and $1,575.”

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