Daily Metals Newsletter

1/12/2016 Good morning from Chicago Get expert perspective on today's Metals markets from some of the most respected names in the industry. Zaner experts have been quoted in Dow Jones Newswires, CME, CBOT & MGEX
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52 Week
High

1305.7 on
01/23/15

52 Week
High

18.530 on
01/22/15

52 Week
High

1266.3 on
01/28/15

52 Week Low 1045.4 on

12/03/15

52 Week Low 13.620 on

12/14/15

52 Week Low 826.9 on 12/03/15

20 Day MA

871.5

20 Day MA

1075.5

20 Day MA

14.000

50 Day MA

876.3

50 Day MA

1079.5

50 Day MA

14.235

100 Day MA 928.5

100 Day MA 1111.1

100 Day MA 14.736

PRECIOUS METALS COMMENTARY

01/12/16
With talk of crude oil going to $20 gold is vulnerable
OVERNIGHT CHANGES THROUGH 6:05 AM (CT):
GOLD -4.40, SILVER -3.10, PLATINUM -5.30
Early Gold Change -$3.90 from the prior session.
LME Copper Stocks 236,525 tons -1,900 tons Shanghai copper stocks +10,717 tons to 188,571 tons.
OUTSIDE MARKET DEVELOPMENTS: Global equities were generally higher overnight with the exceptions the Nikkei, Hang Seng and All Ordinaries tracking weaker. Chinese equities
showed some recovery action after the government showed the capacity to narrow swings in its currency. A number of commodities remain under spillover pressure from crude oil prices
which have finished lower in every session of 2016. The US economic calendar offers a reading on December NFIB small business optimism, which came in at a 94.8 print in November.
The next US data window offers November Job Openings and Labor Turnover (JOLTs) data, which is anticipated to show an uptick from the 5.383 million in October. The US Treasury
conducts a $24 billion 3-Year Note auction around mid-session, which drew a final yield of 1.255% at the December auction. There is one Fed member speech from Richmond Fed
President Jeffrey Lacker on the economic outlook during the mid-afternoon hours. US corporate earnings are expected from CSX Corp after the close of business.
GOLD / SILVER
February gold waffled around both sides of unchanged on Monday in the face of yet another session of patently deflationary commodity pressures. In other words, gold was higher early
because of macroeconomic certainty associated with China, but the trade seemed to become less bullish toward gold as the magnitude of the declines in crude oil prices continue to
unfold. In order words broad-based (nearly historical) selling of commodities leave gold and silver in a short term position to fall back from their highs. We still think that gold and silver will
track the inverse of equities, but the fact that oil prices remain flat on their backs leaves gold vulnerable to additional long liquidation and adversity from the Dollar today. Gold derivative
holdings have shown some expansion of late and that could cushion the potential set back in gold prices today. Bad initial chart action in February gold suggests a liquidation move is
underway and that could quickly see February gold fall back toward the next support level of $1,086.10.
PLATINUM
There is little to describe the action in the PGM complex on Monday other than saying the markets were dealt a significant blow from what would appear to be capitulation of another layer
of longs. As suggested in prior market coverage, the spec and fund long in palladium has to be set to disappear if it hasn't already especially given the sharp declines seen since last
Tuesday. Just because the net spec and fund long is close to being wiped out, doesn't mean the trade can't become net spec and fund short especially with broad sentiment becoming
increasingly bearish toward crude oil prices. However, those that get short run the risk of getting caught if and when some South African production is idled or worse yet, there are platinum
and or palladium mining company failures. In the short-term, there is little value in picking a bottom with the Dollar and slumping oil prices sitting on the back of the PGM's. As in gold and
silver, the action in platinum isn't about PGM fundamentals; it is about China, equities and weakness in most commodities.
TODAY'S MARKET IDEAS: We suspect that gold is poised for a moderate washout given that a collection of lows around the $1,091.80 level were violated early today. Ongoing weakness
in crude oil and aggressively bearish views toward oil prices leave gold and silver in the sights of program sellers today.
NEW RECOMMENDATIONS: Sell February gold at $1,092 with a near term objective of $1,081 and perhaps even $1,071. Risk the trade to a somewhat tight stop of $1,101.
PREVIOUS RECOMMENDATIONS: None.
COPPER COMMENTARY
01/12/16