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Gold prices fell again, registering with the third consecutive drop in a row due to the fact that a stern warning from the International Monetary Fund concerning the growth of the global economy and fears of a slowdown in the Chinese economy have reduced the appeal of gold as a hedge against inflation.
The cost of the precious metal came under pressure, as the situation in Greece is gradually heating up, and the streets are filled crowd of protesters in connection with the visit of German Chancellor Angela Merkel, who has not given any guarantees for further assistance.
Also, the price of gold has affected China's central bank remark that China will maintain a flexible monetary policy, as the economy continues to have a relatively large downward pressure.
Also note that the three-day decline of gold has led to the fact that it is now well below the overbought level (Relative Strength Index (RSI) has fallen below the level of 70 and reached 60).
Gold, which is a traditional tool for hedging inflation may weaken on signs of a slowdown in China, which is the second largest economy in the world and is often considered one of the best factors of global growth.
At this time, the IMF said the global economic downturn worsens, and the inability of U.S. and European politicians to resolve it may aggravate the situation.
Note also that the fall in gold prices was limited by the sharp rise in oil prices due to increased geopolitical tensions in the Middle East.
October futures price of gold on the COMEX fell 2.5$ today and now is 1760.50 dollars per ounce.
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