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Gold flirts with USD 1200 on stimulus hopes

FXStreet (Mumbai) - Gold hovers around the USD 1200 mark as the market expects the European Central Bank (ECB) to announce its own version of QE – sovereign bond purchases – at the Dec. 4 meet.

Gold traded 0.05% higher at USD 1999/Oz levels at the time of writing. Prices recovered from a low of USD 1992.960 as bond yield in the Eurozone slipped to record lows as investors concluded that the implementation of QE by the ECB is inevitable. Thus the yellow metal, known to have an inverse relationship with the balance sheet size of the central banks, gained strength in anticipation of aggressive measures from the ECB.

The yellow metal also receives support from interest rate cut announced by the Peoples’ Bank of China (PBoC) last Friday and the aggressive expansion of stimulus from the Bank of Japan on Oct. 31.

Meanwhile, Gold has declined 0.70% in the EUR terms on the upbeat German data, that pushed the single currency higher against the US Dollar.

Gold Technical Levels

Gold has an immediate resistance located at 1203.50 (50-DMA) above which prices may test 1210 levels. On the flip side, a break below support at 1195 can push the prices down to 1186 levels.

GBP/USD bid within broader bearish trend

GBP/USD is trading at 1.5695, up 0.22% on the day, having posted a daily high at 1.5707 and low at 1.5629.
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