Gold advanced on Wednesday trading on technical reasons as it hovered above $1635.00 an ounce which is 200-day moving average. The shiny metal is relying on technical reasons where it should retreat from the fundamental point of view due to the dollar's rebound and bearishness in the sentiment after dovish comments from Fitch and expectations of slowdown in Germany by Destatis. Fitch said on Tuesday Italy is in the brink of having its credit rating cut. Also, it said a number of euro area economies, including France and Spain, are under review for a possible downgrade at the end of the current month. Furthermore, Fitch predicts the euro area to relapse into a "shallow recession" this year as the severe spending cuts by governments are likely to continue affecting businesses and households' consumption and confidence. What added to recession worries is that Destatis said German growth pace eased to 3% growth in 2011 from 3.7% expansion in 2010, while it expects 0.25% growth in the fourth quarter. Tomorrow and on Friday Spain plans to sell 5 billion euros of bonds maturing in 2015 and 2016 and Italy is expected to auction 3-, 5- and 15- year bills, noting that both countries may reach an aggregate bond selling of 262 billion euros in the first quarter, according to Deutsche Bank AG forecasts. Now, the dollar index, which tracks the greenback's movements versus six major currencies, is hovering around 81.30 compared with the day's opening of 80.86. On the other hand, crude oil is traded lower near $101.40 a barrel, showing some bearishness, compared with the day's opening of $102.17. Spot gold is currently traded slightly higher around $1636.20 an ounce, after recording a high $1647.27 and a low of $1630.35.
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