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THE HIGHTOWER REPORT
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(November 25, 1997) METALS: The metals markets had another bad week in which further evidence of their “commodity” status surfaced. The cash trade took out critical psychological levels around “$300” an ounce and clarifies the near-term trend which remains down. Rumors that an Asian bailout could entail further liquidation of gold reserves was expected but weighs on an already weak structure. Given the recent Commitment of Traders reports gold appears to have further liquidation potential even with it touching a 12-year low last week. At this point long-term changes in gold production might begin but at the current time the press has not carried enough stories to suspect that supply will be an issue as far as traders are concerned. The best thing that could happen for gold might be a major price washout down to 284 and a soothing of Asian concerns at which time the world might be enticed to move back into the long side of gold. In the silver market an even greater liquidation threat is possible given the recent rally on increased volume. With higher volume it would seem safe to expect a great number of longs are already under water and ready to exit. The whole supply issue in silver seems overblown as the stocks on balance have been increasing for the last couple weeks. With gold in such a solid decline its seems unlikely that silver can avoid the same fate.
For daily market updates of the Hightower Report of Comprehensive Commodity Research, call 900-225-2200, extension 5 for Metals Market Forecast. The cost per minute is $1.33.
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