MF Global Daily Report: Precious Metals (Aug. 9, 2011)

Aug. 9 (MF Global) -- Gold prices are expected to enter a choppy-to-higher trend in the near-term, with prices potentially advancing toward Fibonacci resistance at $1,750 in the next couple weeks. Support will come from S&P’s downgrade of the U.S. debt rating, uncertainty regarding the ECB’s purchase of sovereign debt, and concern over the health of the U.S. banking system. The FOMC meeting is today, and any potential action to implement further easing will also offer support. In the background, support will come from central bank buying, investment inflows, and weakness in economic data. We favor treating gold as a positive affair in today’s session.