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Choppy Sideways Trading in Metals


Gold and silver are tracking lower to start today despite interest rates holding at low levels and the dollar basically pinned down near the lows of the prior 4 trading sessions. Unfortunately for the bull camp gold and silver ETFs both liquidated holdings yesterday with gold net sales increasing to 6.2 million ounces.


From a technical perspective, the palladium market has formed 2 sequential triple top formations in the past 6 days, with the most recent triple high providing resistance at $2849. With the markets interpreting Chinese import and export data for May earlier this week as a sign that the pace of the Chinese recovery is slowing (some traders saw the report as a sign of ongoing strength), we see thickening overhead resistance in September palladium at the previous triple high of $2,875.20 level.


It would appear as if July copper has run into a temporary value resistance at $4.5390 with the outlook for the Chinese economy tempered from recent trade data and residual concerns that China is moving to contain inflation. Containing inflation in China is important given expectations for a large jump in Chinese prices tonight from the PPI index which is expected to post a year-over-year gain of 8.5%.

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Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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