Friday, October 7, 2011

Gold finished US trade higher at $1,653

GOLD moved modestly higher in US trade last night and looks set to post solid gains in the com-ing weeks as a base has now been set and a bullish sign is the rise in equities, confidence and a weaker USD. All of these factors will support gold prices in the coming weeks and months ahead. Gold finished US trade higher by 0.70% at $1,653. Silver was the real winner last night as European debt woes subsided and investors finally took on board risk which added more upside to Silver than Gold as it is more tied to economic growth and demand. We remain firmly bullish and long of Gold at a few levels and buy again above $1,679. Stops remain at $1,595 for now until we breach the recent highs above $1,679. Only a move back below $1,595 will signal all is not well with gold prices and we could be set to test major support at $1,550 again. We do not see this as likely and remain buyer into weak-ness targeting $1,725/35 next week. Expect con-solidation in Asia and a $1,636-60 range with a downside bias in Asia as consolidation and profit taking sets in.


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