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Declines in Metals Likely

GOLD / SILVER

The broad market environment today favors the bear camp in gold and silver, with the negative economic comments from China pressuring many commodities. Apparently, the Chinese Premier has warned of new downward pressures on the Chinese economy which some economists suggest could be the result of China fighting inflation by restricting output and potentially reducing commodity demand.

PALLADIUM / PLATINUM

While substitution with the new materials in auto catalysts is a long way off, news that BASF was developing a “tri-metal” as a substitute for palladium to reduce the global deficit contributed some bearishness to the equation yesterday. Going forward, we see outside market influences impacting palladium today, especially if the US Federal Reserve announces it will start tapering this month. Even the beleaguered platinum market forged a big range up move Monday.

COPPER

Overnight the trade suggested that copper has recovered off the tightening of global copper exchange warehouse stocks. However, the streak of daily LME copper warehouse stock declines was broken in London this morning with a gain of 2,550 tons. Given the copper markets intense focus on “all things China” the warning of threats against growth in China from a top Chinese official should have pushed copper into new lows for the move.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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