Outlook: Gold: Oct/2009-Jan-2010

The Spot Gold is at $1052/oz. Traders predicting a "blue skies scenario," led by a resurgence in dollar weakness and weak USD risk appetite.  The most recent trigger was interest hike of 25 bps by Australian Reserve Bank to 3.25 %. Australia's September unemployment rate dropped to 5.7% from 5.8% in August,
contrary to expectations of a rise to 5.9%. The data added to a bullish week after the Reserve Bank of Australia Tuesday became the first central bank among Group-of-20 nations to raise interest rates since the global financial crisis.

This indicated that part of the global economy is stabilizing and inflation may set in. On contrast, US recovery is still uncertain, given the recent up-tick in unemployment numbers at 9.8%. This is almost ascertain, that , there is no quick recue for USD. And the plung may continue, reassuring no near reversal in broad exchange rates. Investors are likely to derset USD as store of value.

Till there is a trend reversal in USD or Fed raises interest rate ( indicative of stability ), and something to do with capital flow revervasl from EMs, the show may go on. Additionally, denied  announcement from Saudi government about their plans to encourage oil-trade on basket of currencies and limiting dollar-denomination.
Expectation:
immediate term: ( 2wk- 1mo): Festive reasons. But, high prices discourage physical gold buyers. Range $ 1050-1070/oz.
Near term: ( 1mo-1qtr): Range: $1030-$1040. USD did not loose much sheen against Euro. Downside is potential. Emergence of stability in excluding US, rest of the globe, fresh uppish range in crude $72-$77/bbl. This may reinstate inflationary fears and natural hedge with gold.