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Metals Give Back Gains


The gold market was presented with bullish and bearish news overnight, but clearly embraced the bear side of the equation. From the bull side of the equation, Indian gold imports for August jumped by nearly 50% last month and reached the highest level since the first quarter reportedly from restocking, bargain-hunting buying and festival interest. Like the gold market, the silver market has also posted significant declines in what appears to be a classic “give back” of an overreaction to the likely delay in US tapering because of the slack jobs report last Friday.


While December palladium has managed to hold above last week’s double low level of $2381 in the early going today, negative spillover pressure from gold, negative Asian equity market action and residual disappointment from last week’s soft US jobs report could result in a downside breakout and a 7-day low directly ahead. The platinum market is also suffering because of the short-term overbought condition from the rally last Friday, but the trade is also discouraged by another large daily outflow from platinum ETF holdings of 8,986 ounces on Friday which in turn has brought the year-to-date change to a decline of 1.2%.


Obviously, the copper trade is very disappointed in Chinese August imports of copper, with August imports dropping by 41% from a year earlier. However, year-over-year comparisons are fraught with problems given strategic stockpile sales from China and a pattern of significant declines in weekly Shanghai copper warehouse stocks.

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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