Sept. 8 (MF Global) -- Price Outlook
The gold market is anticipated to maintain its downward trend in the near-term, with a fall toward $1,750 possible over the next few days. The direction of the market is less than certain at the current juncture given support from an uncertain economic outlook expressed Monday by European banking officials, doves in the Fed like President Evans, and the possibility that tonight’s speech by President Obama unveils new stimulus measures which threaten fresh deficit spending. However, we would also put some focus on the improvement in the ISM non-MFG PMI, hawkish remarks from Fed’s Kocherlakota, and a deteriorating technical construct. We lean negative in our bias and expect a fall toward $1,700-$1,750 over the next couple weeks. A decline may be anything but a straight line fall, as volatility is likely to remain.