THE WINDY CITY TRADER

P.O. Box 1673, Chicago, Illinois

(October 14, 1997) METALS: Funds added over 35,000 long gold contracts during September's rally. The sell- off last week was attributed to profit taking on a portion of these contracts. We expect December futures to hold the 327 area of support for now and begin to rally anew as the implications of higher energy and grain prices (inflation) take hold. A buy near 329 with a stop under 325 might offer decent potential for a fairly low risk. Silver could get stuck in a trading range for now. December should find good support at recent lows near 5.09 and needs a close above $5.33 for a drive to $5.75- $6.00.

Stephen Connell and William Frejlich

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