GOLD gradually approached $1700 during yesterday’s afternoon session before being heavily sold as expiring put and call options concentrated at the level precipitated a pull back to $1680 this morning. The yellow metal surrendered its early gains in line the euro which lost ground against the dollar as a twoday rally petered out. As part of our view yesterday, Bernanke has never taken QE3 off the table and his talk about more supportive monetary measures the previous day did not change his rhetoric. The market has probably come to recognition of this fact and the USD rebounded to correct the overreaction. Looking ahead, as we have suggested before, conservative traders could stay sidelined until the price drifts towards 1600 on a genuine lack of market interest before entering to sell gold, or until the price moves above 1800 before buying for bulls.
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