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Gold closed higher due to short covering on Tuesday as it consolidated some of the decline off December's high. The high-range close sets the stage for a steady to higher opening on Wednesday. Stochastics and the RSI are diverging but are turning neutral hinting that a short-term low might be in or is near. Multiple closes above the 20-day moving average crossing are needed to confirm that a short-term low has been posted. If it extends last week's decline, the 38% retracement level of the 2008-2009-rally crossing is the next downside target.