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Friday, July 23, 2010

Gold Down on EU Bank Stress Test Uncertainty

Gold may be on its way to the negative for the first time in four days, as concerns over the response of investors to the results of the stress test of European banks as they come in.

At about 1:30 PM EDT, spot gold had dropped $5.10 to $1,189.40 an ounce.

Traders have been lowering their exposure to gold as a result, and so the prices have dipped slightly, although they could rebound, depending on what the results of the stress tests are on the 91 banks in Europe that have been subjected to the tests.

Expectations are if equities fall once the data are released, gold prices will probably come under even more pressure because investors will have to sell their positions to cover losses.

The opposite for gold prices today, as mentioned above, would be true on the other side of it.

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