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Alert-18:07 (Est) ACM Precious Metals Analysis: Gold Pares Losses as Negative Development in Sentiment Proves to be Short-Lived
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Gold recouped losses from the last two sessions as sentiment made a swift turn to the risk-seeking mode, pushing down the dollar against majors. The precious metal rose steadily toward the $938oz resistant level as the dollar weakened across the board on the improving equity markets. The Dollar Index slid 0.28 to 79.32, trending sideways in the negative territory for most of the session, unlike the volatile swings seen in dollar movement in the past few sessions amid tentative sentiment. The rebound in gold was in light of the surge in equity markets, which jumped on better earnings–an emerging theme that had been boosting risk appetite in the market, albeit most of them were due to cost-cutting. Also lending support to demand for risk was four-week moving average for new claims dropping to 559k–the lowest level since January, albeit initial jobless claims rising to 584k vs 570k forecasted. The correlation trade in gold remained intact as the precious metal had been moving inversely with the dollar and in tandem with oil, which advanced $3 or 5% to $66bbl. Gold tested $937oz intraday but only fell back down and consolidated around the $935oz level due to a lacking of sustainable drivers behind the move.
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