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Gold Recovers After Huge Slump

July 20, 2015 at 11:48 by Vladimir Vyun

Today, gold bounced after sinking more than 5 percent during the Asian trading session. The metal still trades below the opening level but at least it managed to trim the decline to less than 2 percent.

The metal slumped as Greek banks reopened, though capital controls and withdrawal limits remained in place. Nevertheless, the news suggested that the situation in the eurozone normalizes. This means less demand for safe assets, including gold. Additionally, bullion continued to suffer from speculations that the Federal Reserve will hike interest rates in the near future.

So why the precious metal bounced despite all the negative factors? Market analysts explained that the huge decline attracted traders interested in cheap valuation. The bounce does not mean that market participants should be bullish on gold.

Futures for delivery of bullion in August dropped 1.63 percent to $1,113.40 per troy ounce as of 11:42 GMT on COMEX today. Earlier, the price tumbled as much as 5.3 percent to $1,073.94.

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