IRA EPSTEIN & COMPANY

223 West Jackson, 7th Floor, Chicago, Illinois

(December 16, 1997) METALS: GOLD–Since my report last week, gold has gone into a minor trading range. It appears that gold could be finding support at $285–a historic support number for gold going back to 1985.

Will gold prices sink lower or is gold at a bottom?

As I see it, gold should sink lower over the next six months and I believe traders who are already short gold should remain short. Thin volume during holidays can cause rallies (increases) with little staying power.

In my opinion, traders who would like to get short gold should look at any meaningful rally in price as a selling opportunity.

SILVER–Readers of this report know that I gave a buy recommendation for silver last week before a 40-cent spike upward in prices.

I have been bullish on silver because silver charts have shown a steady uptrend in prices. In addition, news reports for silver have pointed to declining silver stockpiles at COMEX warehouses.

At these levels, I recommend traders take profits and exit the market. In my opinion, traders should consider buying silver again in the near future, if the market holds up over the next week.

COPPER, PLATINUM AND PALLADIUM–Copper has been in a steady decline since June, and from what I see seems to be getting oversold. I believe copper could find support at current levels.

I recommend trader as look for a bottom formation on copper charts at these prices. However, I believe the trend in copper remains at this time overall bearish, so traders should wait for a change in trend before buying copper.

Platinum has been going lower in recent trading sessions. Some news reports have said Japan's economic troubles are pushing prices lower because Japan is a large user of platinum–bad economy = less metals demand. I see platinum's price action as a continuation of an already bearish trend in prices.

Platinum is thinly traded, even more so around holidays. For this reason, I believe platinum traders should expect extra volatility in this market.

Palladium appears to have broken out of a congestion zone. This market has been selling off heavily with several limit moves to the downside. Palladium, being the sister metal of platinum, is feeling the effects of declining platinum prices as I see it.

David Drake

Consensus National Futures and Financial On Line Index

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