THE REAPER
P.O. Box 84901, Phoenix, Arizona
800-528-0559(November 23, 1999) METALS: On March 29, the Bank of England will hold its third gold auction of 25 tonnes. The market is supporting this auction. December gold resistance at $300-$310 will be key as support is now established at $288-$290. Goldman Sachs now is said to control about half of all COMEX gold stocks. Demand for gold in the second quarter 1999 was the strongest ever, up 16% over the same period last year. But gold stocks are back into their trading range. December silver has perked up with gold, having held $5.00 support. Resistance at $5.30-$5.50 could be tested. Is inflation starting to hit gold and silver? Fundamentally, photographic use of silver remains strong. But lackluster demand from India has hurt silver of late. Nevertheless, the 1999 production/consumption deficit in silver is 115 million ounces. World production is expected to be about 570 million ounces, with increased production in Australia and Peru offsetting lower production in Mexico. Scrap silver production is expected to be off also. Copper continues in its trading range, which has been intact since late June. World copper stocks have increased for 18 months. Usage has picked up, however, thanks to the Asian economic recovery. More consumption is the key to a price recovery in copper. Platinum is consolidating in its bull market. Platinum has been supported by the surging Japanese economy, the strength in the yen, and the absence of platinum exports from Russia. Palladium continues in its uptrend.
RECOMMENDATION--Futures investors profitably long December gold take profits. Futures investors may lightly purchase February gold, preferably on weakness, with $289.60 open protective stops. Futures investors may purchase March silver, preferably on scale-down weakness, with $5.14 open protective stops, holding for a test of $5.50.
R.E. McMaster, Jr.
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