Gold Price Lifts Against Macro Concerns

London Oct 16)  Gold continues to garner bids as macro fundamentals continue to favor the upside risk. Uncertainties surrounding global trade, the Italian budget, Brexit and the upcoming mid-term elections in the U.S. have the global financial markets on edge. Although the equity market has somewhat stabilized, we are still over 1,000 points away from last week’s high. The market remains net short and further short covering is probable. From a technical side, gold support sits near the $1,220 level and gold remains constructive above this level. Resistance appears at the $1,237 area and a break here would signal a quick test of the $1,250 level. Silver remains the laggard and although up some 8% from the August lows is more heavily influenced by the threat of a global slowdown. You may not want to chase silver but being short is not a good risk/reward trade.

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