Sept. 27 (MF Global) -- Price Outlook
Precious metals prices are expected to stabilize in near-term trade before potentially moving higher again in the next week or two. The decline in the past two weeks has fully unwound a lot of the bullish enthusiasm grounded in the market’s anticipation of QE3 or other inflationary Fed actions. Europe hasn’t been as big of an issue for gold prices, in our opinion, as gold sold off after Wednesday’s FOMC meeting and recovered yesterday on news of a potential European bailout. Support will come from technical factors, bargain-hunting, and the increasing possibility of stabilization in global financial markets. We were entered into our long trade recommendation overnight Monday at $1,580 but were stopped out shortly after during the market’s sharp selloff. We still like the trade and expect the market to recover to at least $1,700/oz within a week or two.