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Alert-17:45 (Est) ACM Precious Metals Analysis: Gold Rangebound as the Dollar Steadies Ahead of More Corporate Earnings
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Initial price action was choppy early in the session today for gold, as the dollar traded sideways amid muted risk appetite in the market. The precious metal was rangebound and traded between $940oz and $933oz and consolidated around the $935oz level. The failure for the CIT Group to obtain a bailout from the government spurred risk aversion in the market, but the better-than-expected earnings from JPMorgan recouped fading confidence, sending the dollar lower. August gold futures on COMEX dropped $4 to $934oz while the Dollar Index edged down 0.19 to 79.31. Gold price dipped lower as the dollar pared loss after the Philly Fed Manufacturing Index fell to -7.5 vs -5.0 forecasted, which casted doubts over a sustainable recovery. The drop in gold price was short-lived because the unexpected decline in the Philly Fed index was not material and much of the negative sentiment was already priced in. The dollar strength remains the key driver for gold, which at present lacks drivers of its own. The relatively muted action in gold can be attributed to traders awaiting ahead of more earnings on Friday, when Citigroup, General Electric and Bank of America are expected to release figures.
Support: 933.51 Current: 937.40 Resistance: 944.62
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