Sept. 20 (MF Global) -- Price Outlook
Precious metals appear poised to continue their moves to the downside, with gold prices expected to fall toward the $1,700-$1,750 support range within a few weeks. Yesterday’s trade fell on Europe and the Fed, which we had anticipated to be positive in the first half of the week and negative in the second half. The influence of the two factors keep flip-flopping as Eurozone leaders announce new support packages when markets reach the conclusion that a Eurozone member will default. Yesterday’s bad news could easily reverse positive again today, which affirms our intermediate-term expectation that prices will continue falling and that a “sell the rallies” bias is best. Pressure will come from the prospect that the Fed disappoints on “operation twist” and from the fact that metals investors have been uninspired in recent weeks. We favor maintaining a negative trading affair bias in the near-term.