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Gold Quiet to Start Trading Week

Gold prices did not too much of anything today to begin the new trading week. Following recent volatility seen in the yellow metal, a period of consolidation and some back and fill trade would come as no surprise.

Unfortunately for the gold bulls, the precious metals complex continues to face a number of significant headwinds. These headwinds include higher equity prices, the end of QE and a stronger U.S. dollar index.

Investors will likely pay even more attention to the economic data being released over the coming weeks and months as many will be wondering how economic activity will fare without the Fed's bond buying program.

In the meantime, the dollar appears to be headed for another leg higher. Weakness and deflationary pressures in the Euro zone along with economic struggles in Japan could potentially keep the greenback well-supported for the time being. This higher buck may keep any potential rallies in gold or precious metals at bay.

Stocks have recovered following recent volatility and appear to also be headed on another leg higher. Should this prove to be the case, it is likely that risk assets will remain the center of attention and perceived safe havens such as gold may see little significant buying interest.

Gold may potentially test last week's break down area of $1183. Should the market roll over again on a re-test of this level,the market could potentially see significant downside with $1000 per ounce gold a real possibility in the coming months.

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04 Nov 2014 | Categories: Gold

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