Bullion: Weak commodity prices cap upside

Gold may rebound on speculation that the Federal Reserve (Fed) will not increase the interest rates anytime soon, thus eroding the value of the dollar and boosting the appeal of the precious metal as an alternative investment. The slumping housing market and the falling PPI numbers would prevent the Fed from raising the rates. Further, the recent WGC demand trends indicate that the investment demand has moved up amid speculators increasing their bets on gold as the net long positions increased by 9.5% in the week ended November 14.

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