Precious Metals - KitcoPrecious Metals Monthly report Standard Bank Plc Cannon Bridge House 25 Dowgate Hill, London EC4R 2SB 5th November 2007 Precious Metals Sales and Trading •

Precious MetalsMonthly report

Standard Bank PlcCannon Bridge House25 Dowgate Hill, London EC4R 2SB

5th November 2007

Precious Metals Sales and Trading • London 44-20-7815 4210 • New York 1-212-407-5102 • Hong Kong 852-2822-7888Singapore 65-6533-7086 • Dubai 971-4-3300-011 • Tokyo 81-3-4520-6003www.standardbank.com • Reuters prices SBLLMETALS/Reuters direct dealer STPM

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Gold

Gold continued its seemingly inexorable rise throughout the course of October, driven

very largely by professional investment and speculative activity, while the physical market

slowed down and became somewhat patchy. The month opened with a fix of $745.25

and closed with a fix of $789.50, having challenged, but failed to clear, the $800 level

on an intra-day basis.

The strength in price and the speed of its rise militated against physical demand, despite

the fact that this is traditionally one of the stronger periods of the year for regional purchases.

The Diwali Festival and the Indian wedding season are both imminent, although it should also

be remembered that there is a fortnight during October that is regarded as inauspicious for

gold purchases and this undermined physical demand to a degree. On an underlying basis,

however, jewellery demand remains reasonably robust and the generally bullish view of the

market means that buyers are expected to return in force on dips, as happened in the wake

of the correction in prices at the very start of November.

Persistent concerns about the resilience or otherwise of the financial markets and the

downwards trajectory of the dollar have recombined with renewed political uncertainties

to underpin investor and speculative sentiment, but at the start of November there

is a palpable sense that the market has become overbought and needs a short-term

respite.

•

•

•

Gold 1

Silver 6

Platinum Group Metals 9



Precious Metals

0

100

200

300

400

500

600

700

800

Jan-03 Jan-04 Jan-05 Jan-06 Jan-07

Tonnes

300

400

500

600

700

800US$/oz

GBS LSE streetTRACKS iShares

Other Gold PM Fix

0

30

60

90

120

150

180

210

Jan-06 Jul-06 Jan-07 Jul-07

Contracts000s

200

250

300

350

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450

500

550

Contracts000s

Volume Open Interest (rhs)

Dollar:Euro & Gold Price

450

500

550

600

650

700

750

800

850


US$/oz

1.16

1.20

1.24

1.28

1.32

1.36

1.40

1.44

1.48

US$/€

PM Fix $ US$/€

0

50

100

150

200

250


Contracts000s

450

500

550

600

650

700

750

800

US$/oz

Non-Commercial Non-ReportableSettlement Price

Spot gold in dollar terms against $; euro rate

The weakness of the dollar was a much talked-of element in

the markets during October and certainly helped to propel

gold higher. Other contributory factors to gold’s strength,

however, meant that its price rose in other major currencies

as well, gaining more than 5% in euros, yen and Swiss francs,

but almost 6.5% in dollar terms. The markets expect the

dollar to continue to decline and gold prices to resume their

upward march as a partial consequence of this outlook.

Non-commercial and Non-reportable Net Positions

The net speculative long position on COMEX gained almost

100 tonnes in the first half of October, rising from 647

tonnes on 25th September to 744 tonnes on 16th October,

with the gross long position reaching 919 tonnes. Some

liquidation thereafter saw the position contract to 731

tonnes on 30th October. Trading since then has been mixed

and it is entirely possible that here is still some froth in the

market at $800-810.

COMEX Futures volume and open interest ETF Holdings

Open interest on COMEX reached 1,624 tonnes on 29th

October, a gain of 246 tonnes or 18% over the month.

Profit taking saw a very slight decline at month end, but

funds remain essentially friendly to the market and are

expected to re-emerge as buyers on dips in price.

The key Exchange Traded Funds added to their holdings

during October, although at a lesser rate than the strong gains

evident in September. The major funds ended October with

821 tonnes of gold in their vaults against 790 tonnes at the

start of the month. The increase since the start of the year has

been 200 tonnes.



Precious Metals

500

550

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800

850


GoldPrice

100

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120

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XAUIndex

Au $ pm fix XAU

500

550

600

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700

750

800

850


GoldPrice

1100

1200

1300

1400

1500

1600

S&P500

Au $ pm fix S&P 500

Gold and the S&P 500

Gold continued to outperform the major equity markets in

October, for broadly similar reasons to those prevailing in

September, revolving around concerns over financial stability

and prospects for future earnings streams as a result of

slowing growth, along with fears of more write-downs in the

financial sector. Within the S&P 500, export earners remained

reasonably buoyant but the index gained only 0.2% over the

month against gold’s rise of 6.4%. The Dow Jones was in

negative territory, while European indices were stronger. US

investors in particular are nervous at the start of November.

Spot gold vs gold equities

Lease rates eased in early October and then rose through

to mid-month, which is thought largely to reflect reduced

lending rather than meaningful forward sales. Some

borrowing along the curve in late October took three

months briefly over twelve months rates, but this was rapidly

resolved. Liquidity remains plentiful with three months rates

closing the month at just less than 0.3% and twelve months

rates just above that level.

The average dollar price in October, at $754.60, was 29%

higher than that in October 2006. In Indian rupee terms,

by contrast the increase was 12%, reflecting not only dollar

weakness but also independent rupee strength. India

typically accounts for 20% of world gold demand, although

in the first half of 2007 it represented more than 30% of

demand.

Following gold’s intermediate low fix of $725.50 on the 8th,

the price rose by 8.8% over the rest of October while the

XAU mining equities index gained 11.7%. In the latter part

of the month the equities underperformed, suggesting that

a correction in both instruments is expected.

Leasing Rates (%)

Oct % Ch.

US$/oz 2006 Jan-Oct 07 Oct 07 mom yoy

Average 604.06 675.23 754.54 6% 29%

High 725.75 792.50 792.50 N/a N/a

Low 520.75 608.30 725.50 N/a N/a

3-mth 12-mth

Average

2006 0.11% 0.12%

Jan-Oct 07 0.18% 0.23%

Oct 0.32% 0.37%

High

2006 0.19% 0.20%

Jan-Oct 07 0.38% 0.45%

Oct 0.38% 0.45%

Low

2006 0.04% 0.03%

Jan-Oct 07 0.11% 0.10%

Oct 0.25% 0.26%

Prices (based on a.m. and p.m. fix)



Precious Metals

0

100

200

300

400

500

600

700

800

900

Jan-99 Jan-01 Jan-03 Jan-05 Jan-07

GoldPrice

3.5

8.5

13.5

18.5

23.5

28.5

33.5

38.5

43.5

48.5

VIXIndex

PM Fix $ VIX

500

550

600

650

700

750

800

850


GoldPrice

3.5

4.0

4.5

5.0

5.5

6.0

BondYield

Au $ pm fix 30-yr Bond yield

Gold vs the Long Bond Yield Gold and the VIX Index

The reaction of the bond market to the 25 basis point cut in

the fed funds target rate at the end of October was that the

move is potentially inflationary and yields rose accordingly,

after coming under some pressure in mid-month as

investors became increasingly risk-averse. This underscores

the medium-term bullish outlook for gold.

The sustained nervousness in the financial markets resulted

in continued rises in the CBoE VIX index (which is a measure

or market nervousness through the performance of equity

options). After a brief dip in the wake of the Federal

Reserve’s rate cut, the Index has started November at 23.2,

the highest level since mid-September, just before the

Federal Reserve’s 50 basis point cut and this, too, points to

the potential for further safe haven gold purchasing.

The parameter that was most closely correlated with gold

during October was once again the dollar:euro rate with a

correlation coefficient of 87%, while the XAU miners’ index

was 75% correlated with gold. Against the

dollar:yen rate, the correlation was 35%. The CRB Index

bore a 28% relationship with gold over the month, with

the long bond yield showing a similar relationship at 24%.

The underperforming S&P 500 delivered a low relationship,

as might be expected, at just 12%. The expectations for

further weakness against the euro and the yen reinforce the

market’s medium term bullish stance.

Key IndicatorsKey Indicators

Oct % Change

(end-period) 2006 Oct-07 mom yoy

S&P 500 1,418 1,549 1% 12%

CRB Index 368 426 0% 21%

XAU Index 142 188 11% 37%

US 30-yr Bond Yield 4.82 4.74 N/a N/a

Gold Price ($/oz) 635.70 789.50 6% 31%

Key Indicators

Gold

1 November 2007

Darran Grabham* +27-11-378-7228 [email protected]

Gold The $800 level poses a psychological barrier to the rally, but a break higher is expected to occur, yielding a move towards $806. This level may then provide resistance, producing a secondary retracement. Trade from the long side, but we feel it prudent reducing the position on approach $806.00.

Trading activity off the $642 low of 16 August 2007 has produced sharp, short-lived corrections, the latest being this week’s decline from $794.40 to $777.50. The $777.50 level provides initial downside protection. A break lower will suggest that the bull trend has taken a breather, with $766 and the previous corrective low of $756.30 highlighted as additional support points. A break below the latter would imply that a near-term top has formed, exposing the market to the $721.50 corrective low.

Gold strength beyond $806 — this level is gradually rising — will be interpreted as another positive signal, with such a development likely to trigger a move just beyond $850. At this stage, there are no targets above $853, and we await future price developments.

Source: Reuters

Source: Reuters

USD/XAU (Daily)

20Jul07 03Aug 17Aug 31Aug 14Sep 28Sep 12Oct 26Oct

PrUSD

650

700

750

642

746.30

721.50

Trendline provides resistance at $806

USD/XAU (Monthly)

Jan98 Jul Jan99 Jul Jan00 Jul Jan01 Jul Jan02 Jul Jan03 Jul Jan04 Jul Jan05 Jul Jan06 Jul Jan07 Jul Jan08

PrUSD

200

300

400

500

600

700The first level of significant support is at $700



Silver

0

20

40

60

80

100


Contracts000s

6

9

12

15

US$/oz

Non-Commercial Non-ReportableSettlement Price

50

100

150

200


Index

Gold Silver Copper

Dollar:Euro & Silver Price

600

700

800

900

1000

1100

1200

1300

1400

1500


cents/oz

1.16

1.20

1.24

1.28

1.32

1.36

1.40

US$/€

London Fix US$/€

Silver prices continued to rise during October, propelled largely

by the sustained interest in gold, but silver was the underperformer

of the two metals. Silver’s first fix of the month was 1,377.5 cents and,

after an early dip towards $13, prices rallied through the middle of

the month and reached 1,441.0 cents. Along with gold, there was

a bout of profit taking at the end of the month, with prices easing

towards $13.20 on the 22nd. This has been a level of good support

in the past and proved to be so once again, with the spot bouncing

up and reaching $14.50 just before end-month.

Industrial purchasers were few and far between once prices

had moved higher than $14, although there were signs of bargain

hunting on the dips in price, which prompted some short covering

activity. This, along with more fresh longs, was responsible for

the speed of the rally in late October, when prices gained a dollar,

or almost 8%, in the space of three trading days.

The market initially faltered at the start of November but quickly

recovered. Silver has a reputation for volatility, but even so, when it

produces a sharp move such is that in the final week of October it can

generate renewed nervousness. With industrial consumers thin on

the ground then any fresh strength will depend on gold. This would

suggest that, along with gold, silver needs a downward correction in

the near term.

•

•

•

Comex: Silver Non-Commercial and Non-Reportable Positions

Spot Silver Price; Dollar:Euro Rate Silver, gold and copper; Jan 2006=100

The weakness in the dollar over the course of October

meant that, while dollar-denominated silver fixes rose by

almost 4%, the euro equivalent registered a gain of just

2%. In two of the other major producer currencies, the

Australian and Canadian dollars, prices fell by 0.3% and

1.0% respectively. Since the start of the year, the gain in US

dollar terms has been 10%, but in A$ and C$ terms, there

have been marked falls, of 6% and 11% respectively.

The net long speculative position on COMEX continued to

grow in the first part of October, rising from 6,557 tonnes

on 25th September to 7,559 tonnes on 16th October before

easing slightly during the following week. This means

that the position has increased from 4,196 tonnes to 7,961

tonnes between the start of September and the 30th

October, a rise of 3,765 tonnes. Gross longs stood at over

11,000 tonnes, suggesting scope for position reduction.

Silver’s correlation with gold was 81% during the month

of October, while the relationship with copper was much

weaker than in recent months, at just 12%. Copper was

coming under pressure for much of the month while silver

was rising in price. Sentiment in the copper market is still

nervous and this, combined with a likely correction in gold,

also points to caution in silver.



Silver

0

20

40

60

80

100

120

140

Apr-06 Aug-06 Dec-06 Apr-07 Aug-07

MillionOunces

6

9

12

15

US$/oz

iShares Silver Trust Holdings London Silver Fix

Gold : Silver Ratio(London gold p.m. fix US$/oz over London silver

fix US$/oz)

40

50

60

70


The Gold : Silver Ratio

ETF Holdings

At end-September, we were looking for buyers to enter

the market in the region of $13, which is effectively what

happened on two occasions during the month. The $14.50

level then proved insuperable but overhead resistance at

that level was brushed aside in early November. Support

stands at between $13.80 and $14.00. The average price for

the first ten months of the year, at $13.16, is 17% higher than

in January - October 2006.

Holdings in the iShares silver Exchange Traded Fund were

almost static during the course of October. The month

opened with holdings at 4,463 tonnes, where the reported

level stayed steady through almost to the end of the month

when, during the price rally, there was a small addition of

just over fifteen tonnes, or half a million ounces, leaving

holdings at a value of $2.06 billion.

The gold: silver ratio widened during October as a result

of silver’s comparative underperformance, although it

contracted slightly at end-month as a result of silver’s

bounce. In the main, when speculators look to ride a bull

market in the precious metals they take exposure to silver

to benefit from silver’s inherently higher volatility. The

expansion of the ratio from 54 at the start of the month to

more than 56 in late October suggests that silver has been

the follower, not the leader and that speculators are treading

warily.

Silver volumes on COMEX in October averaged 25,107

contracts or 3,905 tonnes daily. This compares with an

average for the first nine months of 25,767 contracts or

4,007 tonnes daily, while the average in October 2006 was

much lower at 1,744 tonnes per day. Shifts in open interest

over the course of the past month reflected increases in

long positions, with more longs and some short covering

developing in the swift rally towards month-end. Open

interest levels at the end of October were at their highest

since 20th and 21st April 2006 when silver had just spiked

from $1,363.0 to $1,431.0 and was falling sharply towards

$1,220. This does not imply that history is about to repeat

itself, but ought to be seen as a warning signal.

Oct % Ch.


Average 11.55 13.16 13.64 6% 18%

High 14.94 14.58 14.41 N/a N/a

Low 8.83 11.67 13.21 N/a N/a

Prices (based on London fix)

Turnover Open Interest Price (US$/oz)

2006 21,820 115,602 11.96

Aug 34,091 118,248 12.28

Sept 24,626 110,650 12.91

Oct 25,107 123,208 13.70

Source: COMEX

Comex Turnover and Open Interest(Number of Contracts, 5,000 oz, daily averages)

Silver

1 November 2007


Silver The bull trend is struggling to surmount this year’s $14.72 high, with a period of volatile consolidation between $14.11 and $14.52 dominating trading activity in recent days. Although silver remains on a general firm footing, caution is now advised ahead of $14.72. There is a possibility of a period of corrective activity developing, forming part of a secondary consolidation phase. Below $14.11, support is situated at $13.88 and then in a broad band between $13.40 and $13.05.

The primary bull trend prevails, and buying into weakness is the advised strategy. The $13.40 to $13.05 support zone is not expected to be breached, with retracements below $14 regarded as a buying opportunity. A push beyond $14.72 is anticipated, targeting the $15.17 high and, once this level is breached, silver should set its sights on the extended objective of $15.54. In the event of continued gains, the bull market may well push onto $16.10. The near-term bias would become bearish through $13.05, leaving silver vulnerable to $12.50 to $12.40.

Source: Reuters

Source: Reuters

USD/XAG (Daily)

20Jun07 04Jul 18Jul 01Aug 15Aug 29Aug 12Sep 26Sep 10Oct 24Oct

PrUSDOzs

11

12

13

14

11.03

13.05

USD/XAG (Weekly)

Jan06 Mar May Jul Sep Nov Jan07 Mar May Jul Sep Nov

PrUSDOzs

10

12

14

15.1714.72

9.38

11.03Testing an important resistance zone



Platinum Group Metals

1,150

1,200

1,250

1,300

1,350

1,400

1,450

1,500

3-Sep 15-Sep 27-Sep 9-Oct 21-Oct 2-Nov

Platinum

660

680

700

720

740

760

780

800

820

Gold

Platinum Gold

Platinum & Palladium

Platinum & Gold Prices

October saw platinum continuing to track gold’s forward

momentum, as it has since the yellow metal resumed its

journey towards $800 in the latter part of August. Whilst an

ever weaker US dollar and accelerating oil prices have been

major drivers in the strength of both metals, platinum has

been further supported over recent weeks by deepening

concerns over supply from South Africa, the world’s leading

producer.

Although industrial unrest and labour shortages have

proved costly for platinum production this year, the big

issue for South Africa’s mining industry is now clearly that

of employee safely, with a tragically high number of mine-

site fatalities already this year and more deaths reported in

October. These recent accidents resulted in shaft closures

in October at Rustenburg (Amplats), Marula (Impala) and

Northam - and follow earlier shaft closures at Rustenburg

in June. Whilst mining is understood to have resumed at all

Oct % Ch.


Average 1,143 1,273 1,410 8% 30%

High 1,390 1,462 1,462 N/a N/a

Low 982 1,112 1,352 N/a N/a

Platinum Prices (London fixes)

of these locations, it would seem that the market’s already

reduced expectations for production growth this year are

again under threat.

Although concerns over these events - which were

concentrated in the latter part of October - enabled

platinum to occasionally outperform gold, its intra-month

gain was actually less than that of gold. Platinum rose 4.6%

during October compared to gold’s 6.3% gain. However,

with gold zeroeing in convincingly on the prospect of new

all time highs, platinum printed a succession of record

fixes over the second half of October, with the current

high water mark now being the $1,462 morning fix on the

29th. However, with gold breaking above $800 in early

November trading and platinum above $1,450, new highs

seem only a matter of time.

Undoubtedly, the deteriorating value of the US dollar has

been a key factor in the strength of both gold and platinum

prices over recent weeks, with September’s 50bp cut in

US interest rates having pressured the dollar through 1.40

versus the euro. Since then, the dollar has continued to

slide in the face of surging oil prices as tensions over Iran

and the Turkey-Iraq situation have escalated. With oil

passing $80 from the 12th and the dollar fading through

1.42, gold breached resistance at $750 and platinum fixed

above $1,400 for the first time in its history ($1,404 am on

the 12th). Thereafter, with oil soaring towards $90, the

dollar spiralled to month end lows of 1.445. In pursuit of

safety, investors flocked to gold, lifting net long positions in

Comex futures to fresh all time highs and the price through

$780. Meanwhile, although failing to surpass the record

levels of July, net longs in Nymex platinum regained the

10,000 contract (500,000 ounce) level in October, closing

the month at 10,704 contracts.



Platinum Group Metals

0

200

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1600

Jan-07 Mar-07 May-07 Jul-07 Sep-07

'000ounces

200

250

300

350

400

US$/oz

Non-Commercial Non-ReportablePalladium Price

0

100

200

300

400

500

600

700

800

Jan-07 Mar-07 May-07 Jul-07 Sep-07

'000ounces

1000

1100

1200

1300

1400

1500

US$/oz

Non-Commercial Non-ReportablePlatinum price

Platinum & Palladium Prices

1250

1300

1350

1400

1450

1500

3-Sep 17-Sep 1-Oct 15-Oct 29-Oct

US$/oz

320

330

340

350

360

370

380

390

US$/oz

Platinum Palladium (rhs)

NYMEX: Platinum Net Positions

Having tested support at $330 during September,

palladium continued to mount a strong recovery over the

first half of October. From an opening fix of $348 (1st am),

palladium touched a high of $380 on the 15th; a level last

visited in April this year. Although palladium had broadly

tracked platinum’s trajectory to this point, it was unable to

defend these gains and quickly succumbed to a round of

long liquidations. This quickly saw palladium moving in

the opposite direction to platinum and gold prices, before

NYMEX: Palladium Net Positions

Oct % Ch.


Average 320 354 365 9% 17%

High 404 382 380 N/a N/a

Low 261 320 348 N/a N/a

Palladium Prices (London fixes)

With net long positions in Nymex palladium futures having

tumbled from a 1.4m ounce high in July of this year to less

than 700,000 ounces in September, the addition of fresh

longs in October (and a modest cut-back in short positions)

saw a marked recovery, with net exposure on the exchange

standing at some 933,000 ounces long at month end.

Although palladium may appear to have been sidelined

for much of October - receiving little media attention

Platinum and Palladium Prices

support was encountered around the $360 level from the

23rd/24th. Although this provided a platform for a prompt

rebound, palladium was unable to overcome resistance at

$375 and eased back to an October close of $370.

by comparison with platinum - its price performance

was actually quite creditable. On an intra-month basis,

palladium gained $18 or 5.1% (fractionally better than the

percentage gain of its higher profile cousin) and it came

within $2 of its 2007 high.



Copyright 2006, Standard Bank Plc, Cannon Bridge House, 25 Dowgate Hill, London EC4R 2SB. This document does not constitute an offer, or the solicitation of an offer for the sale or purchase of any investment or security. This is a commercial communication. If you are in any doubt about the contents of this document or the investment to which this document relates you should consult a person authorised under the Financial Services and Markets Act 2000 who specialises in advising on the acquisition of such securities. Whilst every care has been taken in preparing this document, no representation, warranty or undertaking (express or implied) is given and no responsibility or liability is accepted by Standard Bank Plc, its subsidiaries, holding companies or affiliates from time to time (the “Standard Bank Group”) as to the accuracy or completeness of the information contained herein. All opinions and estimates contained in this report may be changed after publication at any time without notice. Members of the Standard Bank Group, their directors, officers and employees may have a long or short position in currencies or securities mentioned in this report or related investments, and may add to, dispose of or effect transactions in such currencies, securities or investments for their own account and may perform or seek to perform advisory or banking services in relation thereto. No liability is accepted whatsoever for any direct or consequential loss arising from the use of this document. This document is not intended for the use of private customers in the United Kingdom. This document must not be acted on or relied on by persons who are private customers. Any investment or investment activity to which this document relates is only available to persons other than private customers and will be engaged in only with such persons. Standard Bank Plc is authorised and regulated in the United Kingdom by the Financial Services Authority (“FSA”) and entered in the FSA’s register (register number 124823). In other European Union countries this document has been issued to persons who are investment professionals (or equivalent) in their home jurisdictions. Neither this document nor any copy of it nor any statement herein may be taken or transmitted into the United States or distributed, directly or indirectly, in the United States or to any U.S. person except where those U.S. persons are, or are believed to be, qualified institutions acting in their capacity as holders of fiduciary accounts for the benefit or account of non U.S. persons (as such terms are defined in Regulation S under the Securities Act); The distribution of this document and the offering, sale and delivery of securities in certain jurisdictions may be restricted by law. Persons into whose possession this document comes are required by Standard Bank Plc to inform themselves about and to observe any such restrictions. You are to rely on your own independent appraisal of and investigations into (a) the condition, creditworthiness, affairs, status and nature of any issuer or obligor referred to and (b) all other matters and things contemplated by this document. This document has been sent to you for your information and may not be reproduced or redistributed to any other person. By accepting this document, you agree to be bound by the foregoing limitations. Value Added Tax identification number 625861525.

IMPORTANT INFORMATION

Precious Metals

Rhodium Prices

2000

3000

4000

5000

6000

7000

Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07

US$/oz

Avg Low High

RHODIUM

Rhodium continued to show considerable resilience during

October. Prices quickly regained $6,200 in early trading,

scaling $6,300 from the 16th as market offers evaporated.

Although some sellers appeared at this level, volumes were

modest and quickly adsorbed. After highs of $6,325,

rhodium closed the month at $6,300.

With support levels having risen steadily, if unspectacularly,

over the last three months, rhodium is now firmly

established at prices above $6,000. With its position

consolidated, rhodium may well be poised for a test

$6,500, a level last attempted in April of this year.

Rhodium Prices

Source: Johnson Matthey - basis 8am offer

Platinum

1 November 2007


Platinum Immediate trigger points are highlighted at $1,424 and $1,465. The bull trend prevails, but platinum must take out the $1,465 high to negate a near-term bearish threat. A failure to breach $1,465, and a subsequent decline through $1,424 will present a secondary sell signal, yielding a retracement into the $1,402 to $1,391 area. Renewed strength beyond $1,465 will provide an-other buying opportunity, targeting trendline resistance at $1,500.

The $1,500 level remains an important barrier within the broader trend, so the trend may well fail to breach this level at the first attempt, and we would therefore feel it prudent lightening long positions. Platinum gains beyond $1,500 will be expected to open up the topside for a move into the $1,590 to $1,620 zone, with the advance likely to extend to $1,650.

Support between $1,340 and $1,300 represents the first area of significant support, and only a decline through this band will indicate a trend reversal. For now, trading from the long side is the recommended strategy.

Source: Reuters

Source: Reuters

USD/XPT (Daily)

20Jul07 03Aug 17Aug 31Aug 14Sep 28Sep 12Oct 26Oct

PrUSD

1,200

1,250

1,300

1,350

1,400

1,450

1,218

1,340

USD/XPT (Weekly)


PrUSD

900

1,000

1,100

1,200

1,300

1,400

52-week

1,050

(A)

Trendline (A) provides a barrier at $1,500

Palladium

2 November 2007


Palladium The rally off the $313 low has given way to consolidation below this year’s $384 high. The $355 to $343 area protects the down-side, and a positive view is expressed above this support zone. Buying into weakness is the preferred trading strategy, with the market expected to again probe the topside at $384 to $395. Even if $343 is breached, the $326 to $313 base is expected to contain near-term selling pressure, with the outlook only becoming bearish through $313, exposing palladium to $290.

The medium-term bull trend is stalling below a significant resistance zone (refer to bottom chart). A period of protracted side-ways trading activity may prevail, but our bias is that an eventual topside breakout will occur, confirming a primary trend reversal — opening up the topside for a move beyond $650. Last year’s $406 high needs to be surmounted to set up a run at $438 and then $457. The positive view will be jeopardised below $287, with $255 and $243 representing additional sup-port points.

Source: Reuters

Source: Reuters

USD/XPD (Weekly)


PrUSD

200

250

300

350

400406

255

384

313

USD/XPD (Monthly)

Jan98 Jul Jan99 Jul Jan00 Jul Jan01 Jul Jan02 Jul Jan03 Jul Jan04 Jul Jan05 Jul Jan06 Jul Jan07 Jul Jan08

PrUSD

200

400

600

800

1,095

438 406

Long- to medium-term resistance band

Documents

Precious Metals - KitcoPrecious Metals Monthly report Standard Bank Plc Cannon Bridge House 25 Dowgate Hill, London EC4R 2SB 5th November 2007 Precious Metals Sales and Trading •