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"Despite gold's historical positive correlation to the euro, the scope for further euro losses would provide a boost for bullion, in our view, based partially on gold's appeal as a perceived safe haven asset along with gold being a currency that you cannot print more of."
- HSBC (based on CNBC)
Pair's Outlook
XAU/USD cross was rather volatile during the trading session back on Thursday, as market reacted to stimulus announcements of the European Central Bank. Gold traded in the range between $1,280 and $1,307 yesterday, covering two important support and resistance areas inside. As a daily result, the bullion closed just below the weekly R1 at $1,301. This resistance line is actively strengthened by the 2011 low just six dollars from above, and they both are unlikely to give up in the foreseeable future. Therefore, on Friday we may observe a consolidation around $1,290.
Traders' Sentiment
Advantage of bulls over bears to buy the precious metal continues to return back strongly above 60% after a short-term fall a couple of days ago as the share of long positions added four percentage points since Thursday to reach 66% today.
© Dukascopy Bank SA