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More upside for gold?

After another round of disappointing US unemployment data Friday saw the bulls coming out in full force to push the precious metal back above the $1.600 level. As the markets are getting prepared for fresh monetary policy action from both sides of the Atlantic, the yellow metal regained its safe haven status and the market looks geared up for a large move higher. Having started the week sideways, gold saw renewed interest today trading at $1.632 at the moment of writing. As Europe continues to lack leadership and direction, the ECB and Germany stick to their own plans each and the speculation that the Fed would expand its Operation Twist sooner rather than later, gold could be the strongest beneficiary of the situation. Once the market breaks the 23.6% Fibonacci level from the September 2011 high to May’s lows, next target for the bulls to watch will be at $1.681, the 38.2% Fibonacci retracement. As far as support at $1.600 remains intact there is little room for the bulls to worry.

Dafni Serdari
Market Analyst
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