Daily Metals Newsletter

2/08/2016
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52 Week
High

1246.9 on
02/09/15

52 Week
High

17.856 on
05/18/15

52 Week
High

1227.9 on
02/09/15

52 Week
Low

1046.6 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 1114.4

20 Day MA 14.278

20 Day MA 859.1

50 Day MA 1089.2

50 Day MA 14.150

50 Day MA 862.3

100 Day
MA

100 Day
MA

100 Day
MA

1109.6

14.668

903.8

PRECIOUS METALS COMMENTARY

02/08/16
The bull camp retains control even with less equity anxiety
OVERNIGHT CHANGES THROUGH 6:05 AM (CT):
GOLD +18.60, SILVER +16.70, PLATINUM +1.50
Early Gold Change +$9.20 from the prior session.
LME Copper Stocks 227,100 tons -1,550 tons Shanghai copper stocks +17,653 tons to 213,090 tons.
OUTSIDE MARKET DEVELOPMENTS: Global equities were mixed overnight with Asian markets a bit weaker, while European and U.S. markets were mixed to slightly positive initially
before turning sharply lower into the US opening window. The trade looks ahead to Wednesday's US Fed Chair testimony as some players think the Fed Chief will acknowledge the rising
headwinds from equity market carnage and a slack US data trend. The Economic focus in North America today turns to a reading on January Canadian housing starts, which came in at
173,000 in December. The US economic calendar is rather light, with the highlight coming in January Labor market conditions index, which came in at 2.9 in December.
GOLD / SILVER
After finding early strength, precious metals went on a bumpy ride at the end of last week, but gold still reached a new high for the move even if it closed well off its high. April gold has
recovered impressively again this morning but has not forged a fresh new high for the move early on. Although the headline Non-Farm Payrolls reading was much lower than expected, a
sizable jump in average earnings revived Fed rate hike prospects (or helped keep the Fed from being dovish), and that in turn temporarily weighed on gold and silver prices. We suspect
the gold market enters the new trading week moderately overbought, as the April contract from the COT report mark-off date to the high last week managed a gain of $48 an ounce, which
that might vault the net spec and fund long above 100,000 contracts. Some might point to the $20 retrenchment off the highs Friday as a negative development, but a rise in open interest
suggests that longs continue to buy in on rallies. On a positive demand note, holdings for the world's largest gold ETF rose by over 29 tonnes (or 4.36%) over the course of last week, and
expectations for strong GDP growth readings in India could help improve retail gold demand in that country. Until the gold market comes under and sustains weakness in the face of
declines in equities, we have to leave the bull camp with an edge. The Commitments of Traders Futures and Options report as of February 2nd for gold showed the Non-Commercial and
Non-reportable combined traders held a net long position of 88,710 contracts. That reading is understated due to the sharp rally after the report was compiled. Rising open interest on the
recent rally favors the bull camp in silver, especially given the higher high pattern of late. The Commitments of Traders report for silver showed the Non-Commercial and Non-reportable
combined traders holding a net long position of 44,813 contracts, and that reading is probably understated given the 78-cent rally from the report date to the high last week.
PLATINUM
Like gold and silver, platinum continues to get safe-haven and flight quality buying in the wake of significant stock market volatility. Therefore, platinum should continue to derive support
from a weak dollar, especially with upcoming US data expected to be weak ahead of Fed Chairman testimony at mid-week. Unfortunately, platinum only managed minimal gains in open
interest on last week's rally, and that suggests the bulls are not rushing into the market. The Commitments of Traders Futures and Options report as of February 2nd for platinum showed
Non-Commercial and Non-reportable traders combined held a net long position of 24,829 contracts, and that positioning is probably understated given the rally of $61.00 an ounce into last
week's high. After clawing out hard-fought gains for most of last week, palladium lost upside momentum and forged a quasi-reversal at the end of last week. The Commitments of Traders
report for palladium showed that Non-Commercial and Non-reportable traders combined held a net long position of 3,661 contracts, and while that reading is understated, the net long in
palladium isn't overly significant.
TODAY'S MARKET IDEAS: The gold, silver and platinum markets have rejected most of the weakness that was seen at the end of last week, even if prices haven't managed a fresh