Gold Stages Downward Correction

The price of gold fell over the course of the day yesterday, as investors became concerned that the precious metal was overbought after hitting a near seven-month high last week. Gold spent most of the day trading around the $1755 an ounce level, well below the $1777 level it hit after the Fed announced a new round of quantitative easing in the US on Thursday. Today, gold traders will want to carefully monitor news out of the US and its impact on risk appetite among investors. Any better than expected news could help the US dollar extend its recent upward movement, which may result in the price of gold falling further. Typically, a strong US dollar causes foreign investors to shift their money away from gold, as it becomes more expensive for them.

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