With a very negative start to the trading week, it is clear that the gold market discounted news that China closed Hong Kong harbor to US military ships and instead the trade saw the totality of scheduled data released early today as a sign that the world economy was holding up better than many had expected.

In fact, some traders are now suggesting that the better Chinese factory data could embolden them in the talks thereby reducing the odds of a deal.

In looking backward it should be noted that last week's US data was also positive and therefore the environment for gold and silver has deteriorated from a classic economic uncertainty perspective. Some traders are now indicating a down seasonal pattern could be seen between the Thanksgiving and Christmas holidays.

Clearly, the gold market is focused on the ebb and flow of macroeconomic uncertainty and therefore a forecast pegging Australian gold production to decline by 5% to 78 tons for the three months ending September 30th, is basically ignored. However, lower Australian supply was more than offset overnight by reports that Russian January through September gold output increased by 11% over year-ago levels with a total output figure of 268 tons.

At the end of last week, gold and silver ETFs increase their holdings with gold funds adding 55,457 ounces and silver ETFs increasing their holdings by 28,618 ounces.

In looking forward to the US and Canadian scheduled report slate today, it would appear that economic uncertainty is likely to be tamped down further and therefore gold should be expected to remain within the vicinity of the past five days consolidation lows.

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