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Choppy Action, Upside Momentum Waning


While the February gold contract did manage a 7-day high overnight, the breakout up was very modest and failed to hold initially. However, the market should draft support from news that Indian December gold imports increased by 5.4%. Once again, the gold and silver bulls were disappointed by the lack of definitive lift from another downside extension in the US dollar.


There is little reason to change our view of further consolidation action in the PGM markets. In fact, we are hesitant to label the sideways action in March Palladium in early January as a “coiling” pattern as that insinuates the potential for a definitive “move” in prices. Similarly, the platinum market also remains mired in a trading range bound by $1,004.80 and $919.50.


The copper market continued to correct from the explosive rally on Wednesday but respected and rejected the $4.50 level again overnight. Apparently spot demand surfaced perhaps signaling the $4.50 level is a value zone in the near term. In minor negative outside action, nickel and iron ore prices have softened but the copper market is supported because of news that Chinese copper ore and copper concentrate imports in December increased with a 7.6% year-over-year gain.

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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