Despite the fact that gold prices managed a low to high rally of $37 per ounce at the end of last week, we see the bull case in gold moderating. In retrospect, it appears as if the September high was a key high for now with a long list of bullish fundamental forces reduced over the past couple of months.

While it could be premature to suggest that safe-haven is in the process of being pulled to the sidelines by prospects of a "mini trade deal", it is possible that the US payrolls have deflated economic uncertainty and taken the focus of gold away from trade. In fact, seeing a very narrow deal and almost no prospects for a long-term deal could mean trade talks will become very sporadic and that should rob gold and silver of volatility and some long interest.

As suggested, US nonfarm payroll readings served to deflate macroeconomic uncertainty with the US economy "holding together" or by some views actually maintaining forward momentum.

Yet another major blow to the bull camp has been seen from physical evidence of declining Indian and Chinese demand. In fact, overnight Indian gold imports in October were reported to have declined by 33% over year-ago levels! Soft Indian gold demand evidence is very damaging as the strongest demand season of the calendar year has kicked off very slow and might only be resuscitated by much cheaper prices.

Other negative demand news from last week was seen with China's gold consumption in the first three quarters of 2019 falling by nearly 10%. The Chinese demand decline was partially offset by a smaller decline in Chinese gold production.

While it could be premature to suggest that the Brexit situation will see an "end game", there appears to be a desire to simply "end" the situation one way or another.

Even the technical picture has shifted negative with a series of lower highs from the September high showing lost momentum and the gold market maintaining a fairly massive net long of 328,877 contracts.

The Commitments of Traders report for the week ending October 29th showed Gold Managed Money traders are net long 233,101 contracts after net buying 7,171 contracts. Non-Commercial & Non-Reportable traders are net long 328,877 contracts after net buying 794 contracts.

The Commitments of Traders report for the week ending October 29th showed Silver Managed Money traders are net long 49,355 contracts after net buying 5,245 contracts. Non-Commercial & Non-Reportable traders reduced their net long position by 2,917 contracts to a net long 73,000 contracts.

On Friday gold ETF holdings increased by 10,188 ounces while silver ETF's reduced their holdings by 663,274 ounces.

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Non-Reliance and Risk Disclosure: The opinions expressed here are for general information purposes only and should not be construed as trade recommendations, nor a solicitation of an offer to buy or sell any precious metals product. The material presented is based on information that we consider reliable, but we do not represent that it is accurate, complete and/or up to date, and it should not be relied on as such. Opinions expressed are current as of the time of posting and only represent the views of the author and not those of Zaner Financial Services LLC, unless otherwise expressly noted.