Aug. 12 (MF Global) -- Price Outlook
Gold prices will be a tough call today. The market will be susceptible to strength if equities retrench to the downside in a two-day pattern similar to what occurred on Tue-Wed of this week. Such an event is a possibility given the potential ban on short selling in Italy and France which may create a further lack of confidence and an increase in liquidation. However, opposing pressure for gold will come from factors such as growth in risk appetite, the calm that has overtaken banking stocks, the CME’s hike in gold margins, and technical factors. We would lean negative in today’s trade, but would use rallies near $1,800 to short the market given the extreme levels of volatility seen recently.