Oct. 20 (MF Global) -- Price Outlook

Yesterday’s trade formed an inside day and our comment is generally unchanged. The short-term trend is to the upside, with support offered by the prospect of weaker economic activity, additional Fed easing, and favorable technical factors. Dragging on the rally will be a lack of ETF and other investment inflows, “risk-off” trades associated with European sovereign debt, and the potential that the decline in Chinese GDP on Tuesday precedes a drop in Chinese commodity demand. We favor trading precious metals as positive affairs over the near-term. Gold and silver may reach $1,705 and $34.00 respectively in the next week or two.