Gold is recording a bullish outside session. It has traded on both sides of the previous day’s range and it well above the previous day’s high. A close above $1280 would confirm it.
Even before last week’s surprise FBI announcement, the chances of a Trump victory had begun improving from a difficult several weeks. Several national polls show the race has tightened.
Not every is convinced the Federal Reserve will hike rates in December. Three primary dealers reportedly expect the Fed to stand pat.
The Italian referendum will be held in early December. Although Renzi has backed off from this promise/threat to resign if the referendum is not passed, many are still concerned that a loss would destabilize the (fragile) political environment in Italy.
In addition, base metal prices have taken off. Copper, nickel, iron ore,, zinc and aluminum have rallied strongly.
We had anticipated the decline in prices in the second half of September and early-October. However, we recognize that a medium-term bottom is in place and suspect prices can rally as much as $50 over the next month of so. Initially a move above $1292.5 would target $1300-$1310. But should risks materialize, a move toward $1325-$1350 are not a stretch.