Sept. 21 (MF Global) - Price Outlook

Precious metals are expected to maintain their generally downward direction in the near-term. Gold should still reach the $1,700-$1,750 range over the next few weeks while silver will find support from the Aug 25th low at $38.76. Pressure could come from the potential that the FOMC meeting disappoints expectations for significant stimulus measures, additional gains in risk appetite, and from recent CFTC data showing selling by large speculators. The potential that we’re wrong should come from Friday’s bullish hook reversal pattern, ongoing tensions in the Eurozone, and from yesterday’s cuts to global growth estimates by the IMF. A negative technical situation will tip the balance of these factors in favor of the downside, in our opinion. We favor maintaining our negative trading affair bias in today’s trade.