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Gold down over 8% as "ketchup effect" takes hold

FXstreet.com (Barcelona) - Gold has continued its recent collapse, with today´s -7.4% decline the most pronounced decline of the year so far.

Spot opened at 1489.95, and is currently trading at 1358.22 having sliced through the key 1400 level with only minimal support standing in its way. It is believed, but not confirmed, that the combination of the triggering of stop losses following large institutional sell orders and the anticipation of Cypriot (and potentially other distressed Eurozone members) sales, has triggered the “ketchup effect”, by where the leg lower has become exaggerated. Hourly Stochastics are at 31 and still receptive to a push into oversold territory, while RSI is at 18. Hourly MA´s are showing a distinctly bearish outlook.

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