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Looking for Bounce in Metals


With the gold market yesterday falling sharply and forging a 5 day low, it appears as if the market has seen hopes for a stimulus deal decline again. While we would expect to see gold and silver prices bounce in the event a stimulus deal is agreed-upon today, without a deal and especially in the event that discussions are halted until after the election, we would not be surprised to see December gold spike down to the October low of $1,877.


The December palladium contract has forged a triple high around $2,429.70 this week, has not benefited from very upbeat high-frequency economic data from China or from what appeared to be very inflationary predictions from a well-known and successful fund manager. While the platinum market also came under aggressive liquidation selling yesterday, it did manage to reject a large portion of that washout as if value was found at $863.50 in the January contract.


We think the copper market has moved to extract some premium in prices from the long awaited hope for a signed stimulus deal and that could cushion copper somewhat in the event no deal is carved out before the close today. However, longs should realize copper is likely carrying a record spec and fund long and therefore distinct fundamental and or Chart based negatives today could result in a massive stop loss selling wave.

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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