Daily Metals Newsletter

2/17/2016
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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

1196.5 on
03/02/15

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 1154.0

20 Day MA 14.773

20 Day MA 892.5

50 Day MA 1108.0

50 Day MA 14.329

50 Day MA 875.6

100 Day
MA

100 Day
MA

100 Day
MA

1115.0

14.702

903.0

PRECIOUS METALS COMMENTARY

02/17/16
Slight downside follow through buying support is $1,189.60
OVERNIGHT CHANGES THROUGH 6:05 AM (CT):
GOLD -3.60, SILVER -4.40, PLATINUM +1.50
Early Gold Change -$5.10 from the prior session.
LME Copper Stocks 211,800 tons -4,425 tons Shanghai copper stocks N.A. tons to 213,090 tons.
OUTSIDE MARKET DEVELOPMENTS: Global equities were mostly higher overnight with weakness in shares seen in the All Ordinaries, the Nikkei and the Hang Seng. The US economic
calendar begins with weekly US MBA mortgage market data. Attention then pivots to the housing market, with January housing starts expected to show improvement from the 1.149 million
annualized rate previously released. The same data window presents January producer prices that are expected to match the December reading of -0.2%. The next data window offers
January US industrial production that is expected to expand on the month and show considerable improvement from the -0.4% month over month decline seen in December. Of particular
interest during the US afternoon trading hours will be the FOMC minutes from the January meeting, with the focus on the Fed's talk over faltering outside market conditions. St Louis Fed
President James Bullard speaks about the economy and monetary policy late in the session.
GOLD / SILVER
The magnitude of the washout in gold and silver Tuesday was large enough to fear some additional downside today. In the short term more gains in the US Dollar suggests the bear camp
should maintain an edge in the coming trading session. Cushioning gold against further corrective action is a modest continuation of inflows into gold derivative instruments to 44.671
million ounces up from 44.524 million ounces in last Friday's reading. Gold was overbought following the recent COT positioning reading that showed a net spec and fund long of 131,632
contracts especially since April gold into the recent highs traded as much as $72 an ounce above the level where the COT report was measured. While April gold has managed some
consolidation action around the $1,200 level and that might increase support under the current trade we think the charts look vulnerable. In looking ahead to US scheduled data flows
today it is possible that several readings will show some growth and that could add to the upside action in the Dollar and in turn rekindle selling in gold. However, the pattern of late has
been US data that undershoots expectations.
PLATINUM
A big range down washout in April platinum Tuesday was probably the result of spillover pressure from gold. However, pressure from a rising Dollar and lingering macro-economic slowing
fears probably added to the washout tilt. As in gold, platinum has managed to forge some consolidation action just above $925 and that might discourage fresh selling ahead. In fact, we
see a critical pivot point in April platinum down at $935.80 today and to shift the trend in the PGM complex back to the upside might require a rally in April platinum back above $945. With
the Commitments of Traders Futures and Options report as of February 9th for Palladium showing the Non-Commercial and Non-reportable combined traders held a net long position of
less than 1,300 contracts we suspect that palladium prices will hold up better than platinum in the coming trading sessions. However, a sharp decline in platinum and palladium derivative
holdings yesterday suggests that investors were easily pushed from their positions on the recent washout in futures prices.
TODAY'S MARKET IDEAS: Extreme volatility over the last several trading sessions should extend ahead as the trade attempts to determine whether the up-trend is over and a downtrend
is set to unfold. With more gains in the Dollar overnight and the prospect of Dollar supportive scheduled data later this morning, we have to leave the edge with the bear camp in gold and
silver today. We see a critical pivot point in April gold at $1,199.30 and then again down at $1,196.20 and finally at a series of closes down around $1,189.60. Therefore the bear camp
might have an edge this morning as a reversal on moderate volume yesterday should provide some initial selling fuel. On the other hand a rise in open interest also suggests that weaker