Daily Metals Newsletter

1/28/2016
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52 Week
High

1288.0 on
02/03/15

52 Week
High

17.856 on
05/18/15

52 Week
High

1257.0 on
02/05/15

52 Week
Low

1045.4 on
12/03/15

52 Week
Low

13.620 on
12/14/15

52 Week
Low

811.4 on
01/21/16

20 Day MA 1092.7

20 Day MA 14.060

20 Day MA 858.7

50 Day MA 1079.0

50 Day MA 14.093

50 Day MA 858.2

100 Day
MA

100 Day
MA

100 Day
MA

1106.7

14.668

910.6

PRECIOUS METALS COMMENTARY

01/28/16
Minor gains expected but $ must continue to fall
OVERNIGHT CHANGES THROUGH 6:05 AM (CT):
GOLD +5.70, SILVER -3.90, PLATINUM +3.40
Early Gold Change +$3.00 from the prior session.
LME Copper Stocks 241,250 tons +925 tons Shanghai copper stocks +8,081 tons to 194,312 tons.
OUTSIDE MARKET DEVELOPMENTS: Global equities were once again mixed overnight with the Russian market, the Hang Seng and Australian stocks the only major markets tracking
lower. Favorable UK data was partially offset by a downtick in Euro zone consumer confidence. Traders should be aware of an avalanche corporate earnings reports today. US economic
data flow kicks off with a reading on December durable goods orders, that are expected to show improvement and a modest expansion compared to the unchanged month over month
reading in November. The same data window presents weekly initial jobless claims, which is forecast to have declined from the 293,000 reading last week. The next US data window offers
December pending home sales that are expected up +0.8%, which is a notable uptick from the -0.9% month over month decline recorded in November. The US Treasury wraps up this
week's supply offerings with a $29 billion 7-Year Note auction, which drew a 2.161% yield at the December auction.
GOLD / SILVER
With the gold market managing a higher high on Wednesday and showing positive action to start today it has maintained a generally positive technical pattern. A weaker Dollar seems to
have allowed the gold market to shift further away from its recent safe haven focus, and that could set the stage for an extension above the $1,125 level in the coming trading sessions. In
the wake of the FOMC statement and guidance, it would appear that the Dollar is coming under pressure and there seems to be certain amount of relief following the passing of the Fed
decision. However, in order to justify an extension above the $1,125 level in February gold contract ahead might require additional inflows into gold derivative holdings. Overnight GLD saw
inflows of 24,000 ounces to raise total holdings to 42.096 million ounces. Gold derivative holdings have now reached the highest level since November 2nd. Given the upcoming shift to the
April gold contract from the February gold contract, the critical upside pivot point ahead appears to be $1,126. On the other hand, longs have to be careful as nearby gold prices have now
managed a low to high rally of $69 an ounce that could be expanding rapidly the net spec and fund long positioning. Those trading gold might continue to watch the direction of crude oil in
deciding the short term track of gold and silver. In other words in the event that crude oil slides ahead (with the Fed out of the way), that could be the ticket to reverse the nearly two month
old uptrend in gold. At least in the coming session the bulls might be able to control but a loss of upside momentum might precede a correction.
PLATINUM
Fresh divergence in the PGM complex might be the result of a short term overbought condition in platinum and it might also be the result of profit taking off news of steady to higher
production results from Anglo and Lonmin overnight. All things considered, the PGM complex came through the FOMC meeting in relatively good form. With some weakness in the Dollar,
positive ongoing guidance from gold and a modest amount of relief from the passing of the Fed window, it is possible that PGM prices could consolidate recent gains on the charts.
Another higher high for the move Wednesday in April platinum and the highest price since January 8th suggests that something fundamentally might be brewing that in turn could set the
stage for a return to the $900 level. In the March palladium contract, it has somewhat maintained a positive track on the charts but it has lost most of the upside momentum seen at the
beginning of January. In retrospect, for both PGM markets to have posted generally positive chart results in the face of a significant deterioration in world economic sentiment and in the
face of some of the worst stock market action to start a year in decades, there could be something poised to surface that the markets remain unaware of. Critical support in March
palladium is seen at $489.10 and similar support in April platinum is seen at $871.