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Daily Metals Newsletter

2/25/2016
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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 1190.2

20 Day MA 15.082

20 Day MA 920.5

50 Day MA 1126.1

50 Day MA 14.462

50 Day MA 885.5

100 Day
MA

100 Day
MA

100 Day
MA

1120.7

14.733

903.8

PRECIOUS METALS COMMENTARY
02/25/16
Partial Risk off means a choppy two sided trade today
OVERNIGHT CHANGES THROUGH 6:05 AM (CT):
GOLD -6.00, SILVER -10.70, PLATINUM -8.00
Early Gold Change -$2.30 from the prior session. LME Copper Stocks 199,250 tons -3,200 tons Shanghai copper stocks +35,622 tons to 276,904 tons.
OUTSIDE MARKET DEVELOPMENTS: Global equities were mostly higher with the exceptions being the Chinese markets. The steepest loss among the Chinese measures was the CSI
300 Index followed closely by the SSE Composite. With Chinese stocks up sharply in the prior sessions a portion of the steep losses have been discounted as technical but the magnitude
of those declines has fostered some anxiety. US economic data readings kick off with a weekly look at initial jobless claims that are expected to have ticked up from the 262,000 print last
week. The same time window presents a preliminary report on January durable goods, which is forecast to show noted improvement from the -5% decline in December. Data on
December FHFA home price index is also expected. Atlanta Fed President Dennis Lockhart gives opening remarks at a conference in Atlanta during the morning hours. San Francisco Fed
President John Williams speaks on the economic outlook during the later US morning hours. The US Treasury wraps up this week's supply offerings with a $28 billion 7-Year Note auction,
which produced a final yield of 1.759% at the January auction.
GOLD / SILVER
While other markets are seeing ebb and flow from outside market influences, the gold and silver markets on Wednesday really held their rallies. Clearly a growing portion of the world is
looking to safe haven instruments like precious metals and with 6% declines seen in two Chinese stock market measures overnight a certain amount of safe haven interest should be
expected to remain in place. In short the trend in gold and silver is still pointing upward, but the gold market might have been overdone from a short-term perspective into the sharp spike
up move yesterday. However, lingering economic uncertainty with extreme volatility in the equity and currency markets has left the bull camp in gold with an edge to start today.
Furthermore, consistent increases in open interest (over the last month) and inflows of over 6.3 million ounces into gold derivative instruments since the beginning of 2016 should keep
some buyers waiting for corrections to get long. It should be noted that GLD daily holdings rose 8.0 tonnes to 760.3 tonnes yesterday and that is the highest holdings since March of 2015.
From the high Wednesday to the post-high low on the charts, April gold gave back an astonishing $28 an ounce but an attempt to return to yesterday's highs this morning suggests the bull
tilt has come back into play. In a negative note, gold overnight saw news that gold imports into mainland China from Hong Kong in January fell to a 17 month low.
PLATINUM
Like gold, April platinum ramped up early Wednesday but peaked out and gave back significant ground into its close. From the high to the late low yesterday, April platinum surrendered
nearly $20 an ounce! Reports that a Zimbabwean platinum miner posted a loss probably provide some measure of long-term support, but the amount of supply from that company alone
isn't significant enough to swing prices in the short term. With hardly any change in platinum derivative holdings this week, some of the liquidation of holdings that have taken place
consistently since November of 2015 have stopped but the PGM complex really needs to see an inflow of investment to sustain an uptrend and get off the coattails of gold. Despite the rally
attempt yesterday the platinum charts look vulnerable today.
TODAY'S MARKET IDEAS: We remain bullish toward gold, silver and platinum but we think the markets became overbought into their spike highs yesterday. However, with sharp declines
in Chinese equities and a weaker tilt to US markets early on today that bodes well for the bull camp. Therefore, we see several correction points where we think longs might snap up fresh
long positions. Potential buying support is seen down $1,235.30 and then again down at $1,229.40.