Daily Metals Newsletter

2/05/2016
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52 Week
High

1248.2 on
02/06/15

52 Week
High

17.856 on
05/18/15

52 Week
High

1229.0 on
02/06/15

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 1110.5

20 Day MA 14.232

20 Day MA 858.0

50 Day MA 1087.2

50 Day MA 14.137

50 Day MA 861.2

100 Day
MA

100 Day
MA

100 Day
MA

1108.9

14.664

904.4

PRECIOUS METALS COMMENTARY

02/05/16
The bulls look to get what they need from US payrolls
OVERNIGHT CHANGES THROUGH 3:15 AM (CT):
GOLD -0.10, SILVER +1.50, PLATINUM +1.70
Early Gold Change +$1.20 from the prior session.
LME Copper Stocks 228,650 tons -4,050 tons Shanghai copper stocks +17,653 tons to 213,090 tons.
OUTSIDE MARKET DEVELOPMENTS: Global equities were mixed overnight with Asian markets a touch weaker, while European and US markets were slightly positive. The highlight of
the economic calendar today is the January US Non-Farm Payrolls that are forecast to show job gains of around 190,000, down from 292,000 jobs added in December. The unemployment
rate is forecast to hold steady at 5%. A reading on US international trade for December is anticipated to show a slightly larger deficit compared to the 42.4 billion from November. There is
an active flow of economic readings out of Canada, including read on December trade that is expected to show a widening deficit, as well as January unemployment, with the rate forecast
to hold steady at 7.1%. The next data window offers a look at the January IVEY PMI index for Canada that is anticipated to have ticked down from the 49.9 reading in December.
GOLD / SILVER
April gold has extended its latest advance above $1150 and into the highest price level since October 29th. Support recently has come from ongoing weakness in the US dollar as
prospects that the Fed may not be as aggressive with rate hikes has provided fresh speculative and investment interest. There was another increase in SPDR Gold Trust ETF holdings
overnight of 3.57 tonnes to their highest level since last October. With another upward extension in gold and gains in the face of higher equities this morning, the gold bulls have to feel like
they have a trend in motion. In fact, with a lack of alternative safe haven vehicles, gold and silver are simply catching fresh interest even if the gains this morning have been initially
nondescript. However, ongoing investment flow into gold derivative investments gives this wave higher a more significant pedigree. Volume and open interest continue to rise suggesting
that players are not being discouraged by higher price levels. While there was a significant South African mine accident overnight, with nearly 100 miners trapped underground, the gold
market should be expected to remain focused on the demand side of the equation. With significant scheduled data due out later today we can't rule a sharp push higher with April gold
potentially finishing this upward surge with a spike above $1,175 today.
PLATINUM
Significant and perhaps excess spread action between platinum and palladium would seem to suggest that the two markets are being used to be long or short the PGM complex. While
platinum appears like it has garnered a more significant safe haven role, the bull camp probably needs consistent gains in gold and further weakness in the Dollar just to avoid some back
and fill action today. However while platinum and palladium are quasi-industrial commodities and a soft US payroll result could pressure interest in physical commodities, weak data today
should also pressure the Dollar further and that in turn that could add to the initial gains in PGM prices.
TODAY'S MARKET IDEAS: As we suggested twice earlier this week, we continue to think April gold is capable of a spike up to $1,175 if the US non-farm payrolls are patently
disappointing. In other words, slack US data should reduce the prospect of 4 to 5 US interest rate hikes this year, it should slam the Dollar further and it should also fan macroeconomic
uncertainty. In conclusion the bull camp continues to have several bullish themes working in its favor and that in turn is attracting both "investors" and traders. Expect the bull camp to
maintain control as long as April gold manages to hold above $1,150.10. Near-term upside targeting in April gold is seen up at $1,178.20.
NEW RECOMMENDATIONS: None.