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THE PACIFIC COMMODITY LETTER
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360-289-9441(November 21, 1999) METALS: GOLD--Gold is still caught in the 2.90 to 3.00 range; lease rates are low and this is supportive. UK auction is set for November 29 and the market is unlikely to take off before then. Strength in energies have also been supportive.
SILVER--December silver gained about 5 cents for the week, narrowing its trading channel and showing a bit of upward momentum, but remaining bearish in the trend "call." RSI is not an issue; direction and momentum in the short term is bullish. We might get an upturn, but don't anticipate: let the chart give you the signal(s).
Silver is at 5.13 and listless.
PLATINUM--The Russian Duma approved the restart of exports for platinum and palladium and both metals dropped considerably on the futures markets. Other traders cautioned that considering Russia's past performance in this arena it is best to await actual shipments before bailing out. The platinum market was definitely overbought and this was a good excuse to take profits. Funds started to liquidate in earnest, most taking profits. Palladium is following platinum and holding on to support; it may continue to follow rather than lead.
COPPER--December high grade copper rose by 30 cents on Friday to close at 78.55. Funds are buying when daily dips to lows are touched encouraging some to believe that the market will rise from this level. In London, a supportive and positive tone, buying by bankers and dealers was also felt in New York. Volume is down; trading is range-bound and directionless, for the most part. There was a nice drop of almost 3K tons in LME stocks Friday. One day's drawdown will not do it; traders want to see consistent drawdowns over a period of time to get bullish.
In Russia there will be a 5% increase in import duty beginning in December for nickel and copper. It is at 5% now, so that is a 100% increase. Chile's El Tesoro copper mining project will begin immediately, it was announced Friday, expected to produce 75K tons of LME Grade A cathodes. That has bearish implications.
Martin B. Miller