Daily Metals Newsletter

2/19/2016
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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 1166.9

20 Day MA 14.907

20 Day MA 905.7

50 Day MA 1114.1

50 Day MA 14.371

50 Day MA 878.8

100 Day
MA

100 Day
MA

100 Day
MA

1116.6

14.708

902.9

PRECIOUS METALS COMMENTARY

02/19/16
Temporarily overbought from the scorching recovery yesterday
OVERNIGHT CHANGES THROUGH 6:05 AM (CT):
GOLD -6.20, SILVER -8.70, PLATINUM -7.40
Early Gold Change +$6.50 from the prior session. LME Copper Stocks 208,525 tons -1,425 tons Shanghai copper stocks +35,622 tons to 276,904 tons.
OUTSIDE MARKET DEVELOPMENTS: Global equities were mixed overnight with weakness in Asian stocks, while European and U.S. markets were showing positive action early in the
Friday trade. Positive vibes were seen from a much better than expected UK retail sales reading for the month of January. The US economic calendar kicks off with January consumer
price data that is forecast to match last month's 0.1% month over month decline. US core CPI is expected to hold steady at 2.1% year-over-year rate. Cleveland Fed President Loretta
Mester speaks on the economic outlook during the US morning hours.
GOLD / SILVER
After some initial weakness on Thursday, April gold managed to shake off periodic pressure and take out the previous day's high, which dramatically improved the technical setup. We
would also suggest that fundamental sentiment was improved with the surprise recovery, as that action might entice investment flow toward gold in the coming sessions. Another very
impressive rally in gold should catch the attention of key media "talking heads," and that in turn could facilitate increased gold derivative investment flows. Seeing gold derivative holdings
rise to 44,892,000 ounces Thursday afternoon is another development that should facilitate interest in gold ahead. Gold derivative holdings have now reached the highest level since early
May. With gold managing the rally in the face of ongoing strength in the Dollar this week and in the face of non-descript action in crude oil, it is possible that the source of the Thursday
rally was either bargain-hunting buying or because of talk that negative interest rates may spread to other central banks besides the BOJ. In a further show of strength, gold also managed
the sharp gains yesterday in the face of a Goldman short recommendation.
PLATINUM
The PGM complex missed out on the gold and silver rally on Thursday, and that leaves platinum and palladium flat-footed and slightly out of favor going into the last trading session of the
week. About the only positive for the complex is that sharply rising gold prices in the second half of the trade yesterday has probably scared away would-be shorts. In a negative note,
slack US scheduled data, a higher Dollar and declining volume and open interest on the early February rally would seem to suggest that the bull camp just isn't fully into pressing prices
upward. Furthermore, unlike gold derivative holdings, platinum and palladium holdings have continued to decline this week. Critical pivot point support in April platinum is seen down at
$928, and traders have to be watchful of a breakout of this week's coiling action, whether it is to the upside or downside.
TODAY'S MARKET IDEAS: As long as April gold manages to hold above $1,214.40, we leave control of prices with the bull camp. Critical resistance is now seen up at $1,239 and again
at $1,248. As we have suggested before, there is very little in the way of overhead resistance until $1,500 once the nearby gold climbs above $1,250. Uptrend channel support is seen
down at $1,210.80 today and that support rises to $1,218.10 on Monday.
NEW RECOMMENDATIONS: Buy April gold down at $1,201 with an objective of $1,250. Risk the trade to a close below $1,188.
PREVIOUS RECOMMENDATIONS: None.