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Gold drops as USD index clocks three figures

FXStreet (Mumbai) - Gold prices fell on Monday as the USD advanced against majors, taking the USD index to a high of 100.04.

Weak stocks may have capped losses

The metal fell to an intraday low of USD 1067.47/Oz, before recovering slightly to USD 1070/Oz as the rise in the USD index stalled. Meanwhile, the weakness in the equity markets in the Europe and the resulting losses in the US equity index futures appear to have capped the losses in the metal.

The immediate focus is now on the Fed’s decision on the discount rates later today. The US data – preliminary manufacturing PMI, Chicago Fed activity index and Existing home sales could influence the metal.

Gold Technical Levels

The immediate resistance is located at 1075.40 (hourly 50-MA), above which the prices could rise to 1080.69 (hourly 200-MA). On the other hand, a break below 1067.47 (daily low) would expose 1063.27 (Nov 18 low).

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