We find ourselves right where we st

We find ourselves right where we started before short covering occurred on Friday. Secretary John Kerry remarks, that appeared to evolve from frustration, that an attack on Syria would be off the table if the Syrians turned over their chemical weapons to International control. It looked like a tongue in cheek remark, but everyone beginning with the Russians jumped on it. The President now finds himself with a diplomatic, albeit unrealistic, solution on the table; attacking now carries more significant pr risks.

Taking that edge off the market and equity markets are beginning to re-float and created some selling overnight, and although $1,378 held for a good part of the evening, it also finally succumbed. Support is now back at the $1,358 level, which if breached suggests a test of $1,327. $1,378 now becomes the first resistance line and a close above will re-test the $1,388 and then $1,397. As I mentioned over the past week or so, this market REQUIRES new impetus. With ten year yields near 3%, no discernible inflation (at least not through the official numbers), war probably less likely, the short term case for metals looks suspect.

By Peter Hug
Global Trading Director
Kitco Metals Inc.

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