On Kitco.com today...
Wednesday October 16, 2013 08:40
The market had enough weight to breach $1,255 yesterday, where we suggested strong support, but the leaders in Washington managed to blow the deal again which caused the shorts to scramble. Given that the US may default, I would suggest the market momentum looks suspect. The market continues to trade on an expectation of a settlement. I am unable to quantify the size of the spike should a default occur but given the potential (albeit small), the slowing of the economy (as a result of the shutdown) suggests the Fed will be off the tapering bus for the foreseeable future. The expectation would be that gold would, at a minimum, be flirting with the $1,300 - $1,350 range. The market is now in a key range and $1,255 must hold to prevent a test of this year’s lows while $1,325 constitutes the resistance point to entice new buying.
By Peter Hug
Global Trading Director
Kitco Metals Inc.
