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IRA EPSTEIN & COMPANY
626 West Jackson, Chicago, Illinois
(November 11, 1997) METALS: GOLD–In my opinion, traders should sell gold at current prices. Gold's recent break below $320 appears to be very bearish and an “old support becoming new resistance” situation seems to be forming.
I believe time is important when reading charts. The more time an area of support has held, the more important it becomes when this support breaks. (from what I see, $320 had been support under gold since 1985–12 years!)
Recent headlines have included currency panics in SE Asia and world-wide stock market crashes. None of this has stopped gold on its steady march lower. I believe both technical and fundamental factors point to lower prices ahead for gold until we see widespread gold production halts.
SILVER–Silver has been trading quietly in recent sessions. I believe silver had seen some large price swings due to action in gold. Recently, however while gold has been selling off, silver prices have held up rather well due, in my opinion, to reports of declining COMEX stockpiles over the past year.
COPPER, PLATINUM AND PALLADIUM–Copper showed some life early this week, but from what I see copper remains solidly bearish. I believe copper prices are highly cyclical which means prices should turn around and head right back up to their previous highs after a bottom is made. In my opinion, traders should wait for a bottom in copper before getting bullish.
Platinum broke below the critical $392 level and went even lower. In my opinion, platinum's longer-term bull market has broken down and we should see lower prices ahead.
Palladium still awaits a supply agreement between Russia and Japan and has been trading in, what I see as, a somewhat triangular trading range. Palladium will be directly effected by platinum's price break so, in my opinion, a bearish situation exists for palladium independent of the Russian supply agreement status.
David Drake
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