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Gold under pressure, recent uptrend coming to an end?

Gold News

Gold prices were lower once again today following yesterday's large sell-off. After dropping $30 dollars per ounce yesterday the yellow metal gave up another double digit dollar loss today and closed under the psychologically important $1300 level. With gold prices currently trading in the $1294 area, the next near-term support area may be found in the $1280 area.

Yesterday's sell-off was blamed on profit-taking as well as high investor risk appetite. Following the losses yesterday, it was widely believed that perhaps the gold market was simply undergoing a shakeout to get rid of weak longs. The fact that the market could not hold any ground today, however, may potentially indicate that there is more to the selling.

Gold really began to come under pressure again today during comments by Fed Chairwoman Janet Yellen. Although Ms. Yellen didn't really say anything new of any significance, some market participants attributed the renewed selling in gold to her downplaying of inflationary risks. Also hurting gold and silver recently is the continuing slide in crude oil prices. Oil prices are now comfortably back under the $100 per barrel mark, and that may be a bearish factor for precious metals.

The fact that there was additional weakness in gold today may be indicative of the recent uptrend coming to an end. The $1280 area would seem to be the line in the sand. If the gold bulls cannot hold this level, then it seems quite possible that the $1240 level could be tested by the bears. The bulls must recover quickly at this point before further chart damage is inflicted.

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16 Jul 2014 | Categories: Gold

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