Daily Metals Newsletter

1/13/2016
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52 Week
High

1305.7 on
01/23/15

52 Week
High

18.530 on
01/22/15

52 Week
High

1266.3 on
01/28/15

52 Week
Low

1045.4 on
12/03/15

52 Week
Low

13.620 on
12/14/15

52 Week
Low

826.9 on
12/03/15

20 Day MA 1076.1

20 Day MA 14.002

20 Day MA 871.2

50 Day MA 1078.2

50 Day MA 14.197

50 Day MA 873.4

100 Day
MA

100 Day
MA

100 Day
MA

1110.3

14.717

926.6

PRECIOUS METALS COMMENTARY

01/13/16
Gold weakness but strength in Silver, platinum Palladium
OVERNIGHT CHANGES THROUGH 6:05 AM (CT):
GOLD -2.20, SILVER +6.90, PLATINUM +7.70
Early Gold Change -$4.00 from the prior session.
LME Copper Stocks 235,525 tons -1,200 tons Shanghai copper stocks +10,717 tons to 188,571 tons.
OUTSIDE MARKET DEVELOPMENTS: Global equities were mostly higher overnight with the CSI and SSE in Shanghai the only major measures tracking lower. The trade was somewhat
more optimistic toward China this morning with most of the focus on the Chinese currency and not on the weaker action in Shanghai equity market measures. The US economic calendar
begins with weekly MBA mortgage market data. Economic data later in the session offers the December monthly budget statement, which came in at a $64.6 billion deficit in November.
The US Fed releases the latest Beige Book report during the afternoon hours. There is a pair of Fed member speeches during the session, beginning with Boston Fed Eric Rosengern
during the morning hours on the economic outlook. Chicago Fed President Charles Evans speaks at an economic forecast luncheon during the early afternoon hours. The US Treasury
conducts $21 billion 10-Year Note Auction, which drew a final yield of 2.233% in December.
GOLD / SILVER
Gold and silver prices started off weaker and remained weak throughout Tuesday's trading session and that seemed to be the result of spillover pressure from oil prices. While February
gold seemed to find some support just above the $1,085 consolidation level on Tuesday afternoon, that level has now become resistance. Therefore the gold market remains in a long
liquidation posture that continues to see some pressure from strength in the Dollar. While the spiral of deflation is a background issue early today, without better economic readings from a
number of sources and/or a return to patently concerning financial conditions inside China, the path of least resistance in gold is probably pointing downward. The path of least resistance
is pointing down until the February gold contract reaches the next plateau of support down at $1,075. In order to washout and return to the late December lows of $1,056 we probably need
to see fresh new lows in oil, slack economic data and rekindled fears of gradual slowing in China.
PLATINUM
The most recent punishment in the PGM complex might have been the result of bottom picking buyers being flushed from positions. As in many other physical commodity markets, the
thinking in the marketplace is that sharply lower unrelenting declines in crude oil prices signals a global economy that is poised to collapse. While we don't buy into that forecast (made by
some European bank analysts), we can't argue against a continuation of capital and margin selling in the PGM complex if the data remains soft and oil resumes its downward march. In a
surprising development, platinum has actually seen open interest rise on the last wave down and that suggests longs might have been bottom picking and then getting forced from those
positions. In the bull's defense the PGM complex did manage some measure of recovery yesterday but that might have been technical in nature.
TODAY'S MARKET IDEAS: With the Chinese condition upgraded slightly, global equities higher and overall anxiety declining it is not surprising to see gold weaker and industrial metals
prices trying to bounce. From a technical perspective gold is well above its two month lows while silver, platinum and palladium prices are relatively close to their 2 month lows and that
alone gives non-gold metals a bit of an edge today. As suggested already, it might take a rally and close back above $1,094.90 to effectively shut down the bear track in February gold.
NEW RECOMMENDATIONS: None.