Daily Metals Newsletter

2/01/2016
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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 1098.5

20 Day MA 14.098

20 Day MA 857.1

50 Day MA 1080.7

50 Day MA 14.092

50 Day MA 858.5

100 Day
MA

100 Day
MA

100 Day
MA

1106.6

14.658

907.9

PRECIOUS METALS COMMENTARY

02/01/16
While gold starts with a bull tilt gains should be limited
OVERNIGHT CHANGES THROUGH 6:05 AM (CT): GOLD +6.00, SILVER +6.70, PLATINUM -0.50
Early Gold Change +$4.20 from the prior session.
LME Copper Stocks 238,275 tons -2,975 tons Shanghai copper stocks +17,653 tons to 213,090 tons.
OUTSIDE MARKET DEVELOPMENTS: Global equity markets overnight were mostly lower with the exception of the Nikkei and All ordinaries. In addition to slack Chinese January factory
output, manufacturing PMI results from the Eurozone were mostly weak with the German figures countervailing weak Italian and French data points. The US economic data flow begins
with December personal income and spending figures that are both forecast slightly lower than their November readings, but remain in expansion territory. Data out of Canada offers RBC
manufacturing PMI that came in at 47.5 previously. The next US data window provides December construction spending that is forecast to show considerable improvement from the -0.4%
month over month rate in November. January ISM manufacturing is anticipated slightly higher than the 48.2 print in the last report. Federal Reserve Vice Chair Stanley Fischer speaks in
New York during the morning hours.
GOLD / SILVER
All things considered, the gold market has held up impressively in the face of recent Dollar gains and weakness in other commodity prices. Perhaps the bull camp is still garnering residual
safe haven interest because of the historic move by the BOJ to move to negative interest rates but some traders might also be buying gold because of slack Chinese economic readings
overnight as that leaves Asian economic uncertainty high. Clearly financial and economic uncertainty was stoked by the Japanese central bank move but seeing the weakest Chinese
factory output in several years clearly adds to global uncertainty this morning. Others are expecting the Fed's Fischer to acknowledge a slowing trend in the US and perhaps he will also
acknowledge growing international headwinds. In conclusion gold and silver look to be facing a somewhat important decision this week as overall economic anxiety continues to surface
but it doesn't appear to be as widespread as before. Therefore the bulls will need to keep an eye on the Dollar as any continuation of gains in that currency measure could spoil the initial
track higher this week. In looking at the weekly positioning reports gold is carrying a moderately vulnerable net spec and fund long and a portion of those longs might be forced out in the
event that the Dollar resumes its recent pattern of strength. In fact, the Commitments of Traders Futures and Options report as of January 26th for Gold showed the Non-Commercial and
Non-reportable combined traders held a net long position of 69,630 contracts. In a similar fashion the Commitments of Traders Futures and Options report as of January 26th for Silver
showed the Non-Commercial and Non-reportable combined traders held a net long position of 44,148 contracts. While gold and silver aren't technically overbought the spec longs have
been rebuilt to levels where a distinct change in sentiment could result in more significant losses ahead on the charts.
PLATINUM
Like gold, the PGM complex appears to have made a modest top with the highs last week. A soaring US Dollar mixed US/global economic data and the lack of patently bullish internal
fundamentals leaves both platinum and palladium vulnerable going forward. Fortunately, the platinum and palladium markets are catching some periodic lift from equity markets which
have at times tempered big picture macro-economic slowing concerns flowing from China. The Commitments of Traders Futures and Options report as of January 26th for Platinum
showed the Non-Commercial and Non-reportable combined traders held a net long position of 24,480 contracts and that leaves the platinum market vulnerable despite the corrective slide
at the end of last week. The Commitments of Traders Futures and Options report as of January 26th for Palladium showed the Non-Commercial and Non-reportable combined traders held
a net long position of 3,865 contracts which means that palladium is probably less vulnerable to long liquidation than the platinum market.
TODAY'S MARKET IDEAS: We think the bull camp has a slight edge in gold and silver early today as the Dollar is a touch weaker and slack Chinese economic rekindles concerns that
trouble in China might spark additional stimulus action from several global central banks. In fact, residual slowing fears from Japan, China and the Euro zone should support gold to start