Gold: World prices decline for third day

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Gold prices are adjusted downwards for the third day in a row, making last Friday on the highs of mid-summer. Technical correction factor is complemented by a strong dollar, which led to fairly aggressive profit-taking on long positions.
The yellow metal rose in price during the last four weeks. Moreover, since the beginning of the current trading five-day week quotes lost points earned over the previous two weeks. The October ends with good gains after six months of continuous fall. And after a fruitful October, the current correction looks quite justified and deserved.
Demand for the dollar maintains a decent American statistics, the evidence of which was yesterday’s report which showed that consumer confidence in the United States reached 18-year high. Interest in buying the American currency is supported by the divergence of the courses of the monetary policy of the fed and other key Central Bank, especially the Bank of Japan. Today, the Japanese regulator showed openly dovish attitude, hinting at the possibility of expanding stimulus if necessary.
Under these conditions, the metal definitely loses its appeal, especially as investors returned to purchases of risky assets at the end of a difficult month, which was accompanied by significant losses on global financial markets.
But this does not mean that we should give up on the recovery of the precious metal. Investor sentiment remains fragile. Risk factors at the global level – is rife and the dollar is fairly interesting levels for taking profit at the excuse.
From a technical point of view, the picture is getting worse. Today the metal broke the integrity of 1215, which acts as an important support blocking the way to around 1200. To avoid further losses, the quotes need a daily close above this area.
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Michael Mashchenko,
Analyst social network for investors
eToro in Russia and the CIS