Oct. 18 (MF Global) -- Price Outlook

Gold prices are expected to maintain their short-term uptrend and approach resistance at the $1,705 level over the next few days. Support will come from technical factors, favorable COT data reported last Friday, and from the potential that Friday’s CPI data in China allow the gov’t to ease policy next year. The downside will look to the day-today developments in the Eurozone, lingering doubts about final plans for the euro, and the possibility that a correction in an overbought stock market pressures gold. We favor maintaining our bias to trade precious metals as positive affairs in the near-term.