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Downward Bias in Metals Remains


The overall environment for gold and silver entering the last trading session of the week remains bearish with huge declines on the charts, another definitive upside breakout in the dollar early on, indications from the US Federal Reserve Chairman that the rate rise is not disorderly (which has fostered views that the Fed will allow for even more gains in rates) and yet another day of outflows from gold ETF holdings.


Obviously, the path of least resistance in platinum remains down to start last trading session of the week as outside markets are applying pressure and platinum ETF’s yesterday saw a very sizable outflow of 8,384 ounces lowering the year-to-date gain in ETF holdings to only 0.7%.  Fortunately for the bull camp in palladium, the latest net spec and fund long was virtually flat at 1,335 contracts and that appears to have limited declines in palladium this week.


We are somewhat surprised with the copper market’s capacity to regain positive territory this morning in the wake of another significant jump in weekly Shanghai copper warehouse stocks as that insinuates soft demand on the ground in China. However, the market appears to be drafting some support from Chinese growth targeting of 6% for this year and from news that the Chinese government intends to add 11 million urban jobs this year in effort to bring inland areas toward the growth seen along the coast.

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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