Gold Price Risk Is To The Upside
(Kitco News)- As per our comment last week, we remain constructive on gold and continue to see the risk to the bear camp. The first nudge was the lowerPPI print, which created some speculation that the Fed may be less aggressivegoing forward. Then came yesterday's suggestion that the U.S.-China trade warmay be calming, with the U.S. invitation to the Chinese to continue dialogue.Interest rates still favor the dollar but any conciliation on the trade frontshould mitigate dollar flows from a safe-haven perspective. This is certainlynot an all clear for gold, but it looks like the bottom has been established inAugust. The shorts will become increasingly restless should gold break above$1,212 and given the amount of short interest in the market, the exit door isgrowing smaller. We see small support at the $1,202 level.
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