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Daily Metals Commentary Wednesday April 14, 2010 www.nsfutures.com We welcome those who are interested in managed futures/options programs to visit our site at http://www.nsfutures.com/managed.cfm. PRECIOUS METALS COMMENTARY 04/14/10 INSIDE AND OUTSIDE FACTORS ARE BULLISH TODAY THE BULLS SHOULD CONTROL OVERNIGHT CHANGES THROUGH 6:05 AM (CT): GOLD +4.80, SILVER +14.60, PLATINUM +12.60 London Gold Fix $1159.00 +9.75 LME Copper Stocks (Apr 14) 509,650 tons - 975 GOLD stks 10.074 ml oz +698 oz SILVER stks 115.8 ml oz +748,687 oz OUTSIDE MARKET DEVELOPMENTS: While the US Dollar is showing signs of weakness this morning, the metals markets seem to be garnering their bullish initial tilt from improved economic expectations in the wake of an up beat tech sector earnings report overnight. With Intel beating expectations and suggesting they were seeing increased business spending, that seems to have lent fresh support to precious metals and a host of physical commodity markets. One might also suggest that concern toward the Greek debt issue was relegated to a back burner status. With the markets expecting some form of moderate gain in US retail sales readings later this morning the positive tilt toward the economy might be sustained into and through the US Wednesday morning action. With energies and a number of industrial commodity markets trading higher today, the outside market influences would seem to be initially favoring the bull camp. There will also be a US CPI report out this morning and expectations for that report aren't particularly significant. GOLD GOLD MARKET FUNDAMENTALS: The June gold contract has managed to rise above the prior session's high in the early action today and it generally managed to respect the even number $1,150 on the charts early today. The bull camp will suggest that the market is seeing an improved macro economic sentiment, without much in the way of fresh anxiety from the EU debt front. The bear camp is trying to play up the prospect of a possible change in the Fed's interest rate statement, with the Fed's Lacker overnight suggesting he was becoming less comfortable with the leaving rates low for an extended period of time statement. If the bull camp is really benefiting from improved economic sentiment, then this morning's retail sale report should give the bull's added incentive. With the US CPI report also due out today, there could be some cross currents for the gold trade from the Fed policy debate front. The gold market might also garner some lift from very favorable Indian monthly gold import figures overnight but recently the gold market has tended to give demand side stories more credence than supply side developments. Gold Stocks for April 12th were 10.074 million ounces up 698 ounce. Therefore, gold stocks have extended their recent pattern of new record stock levels. The bull camp has come back into control again and this time there would seem to be several themes contributing to the upside tilt. In addition to impressive Indian gold imports, the trade is seeing higher equities, a better economic outlook and a weaker US Dollar. Close- in support is seen at $1,154.70 in the June gold today, but there might not be much in the way of resistance until the $1,165.80 level. In fact, in the face of a big range up move in the equity markets today, the gold market could even make a bid at the $1,175 level. However, in order to keep the bull tilt intact, the market probably doesn't want to see something patently hot from the CPI report, as that could prompt talk of higher US interest rates. At least at the start today, the gold bulls have a real chance to push prices higher, but some buyers might be waiting for confirmation of a decent US retail sales reading. It is possible that investment interest for gold could return in earnest and that could result in a very big upward move directly ahead. SILVER SILVER MARKET FUNDAMENTALS: While May silver has managed to rise above the prior session's high in the early Wednesday trade, the silver market was still trading below this week's highs. However, silver and other physical commodities seem to be benefiting from an improved macro economic outlook that seems to be the result of better than expected Intel Corporate earnings news. However, the silver market did see news of increased 1st quarter physical silver production from a key Mexican silver mining company overnight and that might have held back prices early today. Surprisingly the copper market is showing some weakness early this morning and that might be considered a minor negative outside market issue for silver by some traders. In another minor negative, exchange silver stocks for April 12th were 115.815 million ounces up 748,687 ounces. It would appear that silver is set to behave like a classic physical commodity market that is at least temporarily being cheered by favorable economic views. The big question will be whether the US retail sales and CPI reports further economic optimism or will they temper the new found optimism. The bulls have the edge from a number of angles this morning. With the noted correction over the two prior trading sessions, the bull camp should also have the benefit of favorable short term technical arguments. We see the distinct prospect of a fresh new high for the move and a trade at the highest level since January 20th. Initial resistance today is seen at $18.60 and critical close-in pivot point support on the charts is pegged at $18.35. Under a consistent improvement in economic sentiment, we see a near term run up to $18.875. It is possible that investment interest for silver could return today and that could result in some significant upside action in silver over the coming trading sessions. METALS TECHNICAL OUTLOOK: Note: Technical commentary is based solely on statistical indicators and does not necessarily correspond to any fundamental analysis that may appear elsewhere in this report. COMEX GOLD (JUN) 04/14/2010: Daily stochastics have risen into overbought territory which will tend to support reversal action if it occurs. The market's short-term trend is positive on the close above the 9-day moving average. The market setup is somewhat negative with the close under the 1st swing support. The near-term upside target is at 1164.7. The next area of resistance is around 1158.7 and 1164.7, while 1st support hits today at 1146.1 and below there at 1139.4. COMEX SILVER (MAY) 04/14/2010: Studies are showing positive momentum but are now in overbought territory, so some caution is warranted. The market's short-term trend is positive on the close above the 9-day moving average. It is a slightly negative indicator that the close was lower than the pivot swing number. The near-term upside objective is at 1855.3. The next area of resistance is around 1842.2 and 1855.3, while 1st support hits today at 1805.8 and below there at 1782.4. Futures and options trading involve substantial risk. The valuation of the futures and options may fluctuate, and as a result, clients may lose more than their original investment. In no event should the content of this website be construed as an express or implied promise, guarantee or implication by or from NSfutures Group or Fox Investments that you will profit or that losses can or will be limited in any manner whatsoever. Past results are no indication of future results. Information provided on this site is intended solely for informative purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. 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