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Chinese demand rises amid falling Gold prices

FXStreet (Mumbai) - The Gold prices have lost almost USD 50 since the Federal Reserve ended its QE program while sounding upbeat about the US economy. Despite this, Chinese demand as reported by Shanghai Gold Exchange (SGE) appears to have increased sharply.

The latest weekly withdrawals figure from the SGE hit 59.7 tonnes, which takes the aggregate total total Chinese gold demand this year to 1 600 tonnes. Moreover, the total demand for 2014 may exceed 2000 tonnes if the size of the weekly withdrawals remains constant in the days ahead. Last year, Chinese demand was huge even though Gold prices were pummeled.

The yellow metal is trading largely unchanged today at USD 1171.30/Oz. A sharp rise in the US Dollar index is capping gains in the yellow metal. Meanwhile, Gold may post gains if the US manufacturing data due for release at 15:00 GMT disappoints market expectations.

Gold Technical Levels

Gold has an immediate resistance at 1183.50, while the immediate support is located at 1160.50 levels.

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