With gold close to $1,110, we have seen some physical buying return

Greece is struggling with its debt burden, reflected by Greece sovereign bond spreads having risen sharply in recent days. The euro may therefore continue to struggle. And so, we expect precious metals to struggle too.















Friday's US data was very positive — especially consumer confidence data. However, we also see the rise in US business inventory in October as positive. It is the first time since August 2008 that US businesses have increased their inventories. Once businesses start to re-stock, the recession seems destined to end. With gold close to $1,110, we have seen some physical buying return. However, given that we expect headwinds for the euro, we still prefer selling into rallies. We see support at $1,110 and resistance at $1,142.

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