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Alert-20:08 (Est) ACM Precious Metals Analysis: Gold Firms as Dollar Slips on Rebound in Equities as German Investor Confidence Beats Expectation
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Gold recouped losses on the back of a weaker dollar as improved investor confidence from Germany lent support to equity markets. The ZEW Center for European Economic Research reported its index on economic sentiment jumped to 56.1 vs 45 expected, the highest level since 2006. Gold edged up $4oz or 0.5% to $938oz after the precious metal fell in sync with equities and energy yesterday. Gold pared losses and consolidated a fraction above a key Fibonacci level, which acted as near-term support. Momentum in gold appeared to be directionless but leaning slightly toward the weaker side as RSI hovered around the 45 level. December gold futures on the COMEX rose for the first time in three sessions, up $3oz to $939oz while the dollar index slid 0.26 or 0.33% to 79.03. The SPDR Gold Trust reported that its holdings remained unchanged at 1,065.49 tons as of August 17. On the physical demand front, July gold imports from India tumbled 67.5% to 7.8 tons yoy. The import drop from the world’s largest consumer of gold reflected ebbing demand for the precious metal as the global economy normalizes. The price action in gold has been dollar-centric for the past month, with the correlation between gold and EurUsd currently at 0.91. We view gold to be range-bound until the market indentifies the next catalyst, which will shed more light on gold direction.
Support: 934.58 Current: 938.07 Resistance: 940.91
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