Daily Metals Newsletter

2/12/2016
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52 Week
High

1263.9 on
02/11/16

52 Week
High

17.856 on
05/18/15

52 Week
High

1215.4 on
02/13/15

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 1142.2

20 Day MA 14.637

20 Day MA 881.5

50 Day MA 1102.0

50 Day MA 14.276

50 Day MA 871.7

100 Day
MA

100 Day
MA

100 Day
MA

1113.5

14.691

903.0

PRECIOUS METALS COMMENTARY

02/12/16
Some back and fill action not an end to the 2016 uptrend
OVERNIGHT CHANGES THROUGH 3:15 AM (CT):
GOLD -9.10, SILVER -10.90, PLATINUM -8.30
Early Gold Change -$9.80 from the prior session.
LME Copper Stocks 220,225 tons -4,525 tons Shanghai copper stocks N.A. tons to 213,090 tons.
OUTSIDE MARKET DEVELOPMENTS: The big story of the overnight trade was sharp declines in Japanese stocks which in turn spilled over into other Asian markets. The Nikkei was
down nearly 5% led by weakness in exporters. The economic focus today turns to the US with a reading on January import prices and retail sales. Retail sales are anticipated to show a
slight expansion, as well as improvement from the -0.1% month over month decline seen in December. Some are suggesting that retail sales might be negatively impacted by severe
weather! The next US data window offers a private reading on February consumer sentiment that is expected to have ticked up from the 92 print last month. There are a pair of Fed
member speeches this morning, beginning with Dallas Fed President Rob Kaplan at a housing outlook conference, and then by New York Fed President William Dudley on household debt
and credit.
GOLD / SILVER
Precious metals exploded to the upside Thursday and traded to their highest level in over a year but they are falling back in the early Friday trade. Testimony this week by Fed Chairman
Janet Yellen seemed to confirm the idea that the Fed will postpone further rate hikes and that combined with a significant risk-off environment provided the quasi-blow-off rally yesterday.
However, with Ms. Yellen didn't totally disregard the Fed employing a negative interest rate maneuver that should keep safe haven sentiment waiting in the wings for gold. When asked
about it, she stated that while she doesn't think the Fed will need to push short-term rates into negative territory, the Fed was "taking a look" at the idea, and this only served to confirm the
idea that an impending rate hike was dead in the water. Not surprisingly the world's largest gold ETF saw their holdings rise by 13.98 tonnes on Thursday, and those holding have now
reached their highest level since May of last year. The fundamental outlook for gold is bullish but technical week ending profit-taking appears to have emerged early today in the face of
higher US equities.
PLATINUM
While both platinum and palladium were on-track for healthy weekly gains, they are clearly vulnerable to the pullback in gold prices this morning. A slight up-tick in platinum and palladium
derivative holdings this week breaks a long string of declines and suggests that some of the investor interest flowing today gold is spilling over into PGM's. While there are indications that
upcoming South African wage negotiations will be less acrimonious than in recent years, the main mineworkers unions have a tense relationship with each other which raises the
possibility of a strike later this year. South African mining companies remain in very dire financial straits which should make it more likely that production cuts and mine closures could
occur ahead.
TODAY'S MARKET IDEAS: A moderate short term overbought condition combined with positive US equity market action and a slight bounce in the Dollar has fostered week ending long
profit taking. Critical support in April gold is seen at an old of 2015 highs of $1232. Closer-in support is $1234. While gold is trading at its highest level in over a year, silver has mostly
carved out a consolidation range and that clearly suggests it continues to track classic physical commodity market factors. This puts resistance for March silver at $15.81 and support
comes in at $15.62. Support for April platinum is seen down at $939.