Daily Metals Newsletter

2/18/2016
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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 1159.2

20 Day MA 14.832

20 Day MA 899.1

50 Day MA 1110.5

50 Day MA 14.346

50 Day MA 877.0

100 Day
MA

100 Day
MA

100 Day
MA

1115.6

14.704

902.9

PRECIOUS METALS COMMENTARY

02/18/16
Partially negative vibe off renewed global slowing fears
OVERNIGHT CHANGES THROUGH 3:15 AM (CT):
GOLD -3.60, SILVER -9.70, PLATINUM -4.50
Early Gold Change -$5.40 from the prior session.
LME Copper Stocks 209,875 tons +75 tons Shanghai copper stocks N.A. tons to 213,090 tons.
OUTSIDE MARKET DEVELOPMENTS: Global equities were mostly higher overnight with weakness in the Shanghai Composite, the FTSE and some minor European measures. The
markets might have been partially undermined by downward revised growth projections from the OECD which seemed to be calling for very aggressive government spending action to
head off significant slowing ahead. The US economic calendar today begins with a weekly look at initial jobless claims that is forecast to have ticked up from the 269,000 print last week.
The same data window provides the Philadelphia Fed manufacturing index that is anticipated to show improvement from the January reading of -3.5, but remain in negative territory. The
next US data window provides a look at January leading indicators that is anticipated to match the -0.2% month over month change in December. The US Treasury conducts a $7 billion
30-Year TIPS auction during the later morning hours, which drew a yield of 1.2% of the last auction. There is one Fed member speech scheduled, from San Francisco Fed President John
Williams on the economic outlook later in the US trading session.
GOLD / SILVER
Gold has started out weaker this morning in the wake of more Dollar gains and downwardly revision global growth forecasts from the OECD. While the OECD called for increased
government spending to head off more severe slowing and the US Fed acknowledged downside risks to the US economy from market turmoil gold is not benefiting from that news. With
gold derivative holdings falling yesterday and April gold extending a pattern of lower highs it is possible that more downside retrenchment will be seen in gold and silver prices later today. A
potential positive for gold and silver is the fact that the Fed is at least analyzing the potential for the implementation of negative interest rates. Another minimally supportive development
was yesterday's news of a downgrade in Anglo-American's credit rating as that increases the prospect of reduced output ahead. A positive that has been mostly discounted overnight is
talk that Chinese investors might turn to gold because of ongoing turmoil in Chinese equities. On a setback to $1,182 in April gold we would consider entering long-term position plays
while shorter-term players should look to buy in at an even lower price on the charts of $1,173.
PLATINUM
Unlike gold and silver, the PGM complex fared better in the Wednesday trade with positive closing action. With the downgrade in Anglo-American's credit rating, the potential for disruptions
of production increases slightly but this morning the PGM complex is starting off on a back foot. In fact, April platinum has extended a pattern of lower highs on the charts and that
combined with spillover weakness from gold leaves the trend in favor of the bear camp today. For the time being, the platinum market looks to be the strongest PGM market but given the
much smaller net spec long positioning in palladium, palladium might lag behind platinum on downside moves. As in a number of other physical commodity markets, less drag from weak
crude oil and equity prices probably means less aggressive selling in many commodity markets.
TODAY'S MARKET IDEAS: We think the uptrend is generally still intact in gold, but we can't rule out more minor corrective action or simply sideways consolidation today. Positive equities
and higher crude oil prices helps to keep disappointing growth views in check and that in turn reduces the dark cloud of deflationary psychology. Falling volume and open interest on the
slide this week is another bullish technical indicator but we can't rule out a slide down to $1,200.10 later today. However, the failure to hold $1,191 could ignite another significant washout
in Gold to end this week.