While the December gold contract did not technically forge a lower low this morning, the charts remain negative and the overall macroeconomic environment doesn't have the feel of enough anxiety to reverse that bias.

However, the market does appear to have found some support around the $1,450 level and Chinese auto sales for October were soft enough to foster some economic uncertainty. On the other hand, both gold and silver ETFs liquidated holdings again yesterday with the gold sales the fourth straight day of sales.

Gold ETFs sold 66,248 Troy ounces worth of gold while silver ETFs sold 286,553 ounces. According to an article on Bloomberg this morning, the world's largest gold ETF saw $620 million worth of gold shares liquidated Friday which is the single largest draw since October 2016!

In yet another negative story Morgan Stanley has apparently cautioned on gold prices suggesting the potential for a $1,394 price in the first quarter of 2020 is possible in the event that tariffs are rolled back. All things considered, the gold bulls have to be extremely disappointed with the action in the market to start the new trading week.

In addition to escalating violence in Hong Kong, the precious metals trade should have been supported by news that Iran was enriching uranium again. In short, the charts remain negative in gold and bullish fundamentals have not stirred bargain-hunting buying.

In fact, even some of the gold bug websites have turned doubtful toward gold and it would appear as if investment in gold derivatives like ETFs have started to fall back. In short even with the downside action since the last COT report was measured, we suspect the net long in gold remains burdensome and further long liquidation selling is likely.

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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.