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Gold slides on profit taking

Gold has given up some of its recent gains as traders take their profits off the table.

Gold is trading at $1326, down 1.1%, as traders secure profits from its positive run since the start of the year. As Peter Martin stated yesterday, the metal was trading close to its highest level in four months, which has prompted profit-taking today.

Since the start of the year the precious metal is up over 10%. This is a big rebound from 2013 when the metal finished down on the year for the first time in over a decade. Financial markets don’t move in straight lines so a sell-off is no surprise.

Today’s decline in gold has been compounded by the strength in the US dollar. The precious metal is traded in US dollars and if the dollar is strong, it makes gold relatively more expensive to buy, thus pushing the price lower.

Gold is finding support from the 200-day moving average of $1324 and a move below this could push us towards the $1300 level. Gold is in a steady up-trend and I think it is a good opportunity to buy on the dip.

Spot gold chart

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