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General Commentary:Written on Tuesday, December 18, 9:00 p.m. US East Coast time). Gold fell by about 2% onTuesday to its lowest level since August, hit by a wave of selling triggered on growing hopes that a scal x is comingthrough after all. If this does indeed happen, the attraction of holding gold should wane (theoretically), as any agree-ment that restores at least $2-3 trillion of both revenue increases and spending cuts over the next 10 years would be animportant step in getting the USs scal house in order.

There is, however, one problem with the cause-effect dynamic between a healthier US balance sheet and weakergold prices, and that is that this relationship has not always been consistent. In this regard, we have seen instances inrecent weeks where gold ralliedwhen the two sides in Washington were making progress on the talks, but proceededto sell offwhen the talks oundered, exactly the opposite of what we saw happen on Tuesday. Perhaps sentiment thistime around is changing, as investors may be sensing that with only 12 days left, both parties have their backs againstthe wall and need to come up with a deal.

The latest positions in the talks are not that different from what we outlined in Mondays note; President Obamas planwould raise $1.2 trillion in taxes over the next decade on those making $400,000 a year or more, and cut $1.22 trillionin spending, including a measure to reduce Social Security cost-of- living increases that theoretically should trim out-lays by $130 billion over 10 years. The administration is also asking for a two-year extension on the debt ceiling.

Commodity trading is risky and FCStone Group, Inc., INTL FCStone Inc., and their affiliates assume no liability for the use of any information contained herein. Neither the information

nor any opinion expressed shall be construed as an offer to buy or sell any futures, options on futures contracts, or OTC products. Past financial results are not necessarily indicativeof future performance. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to thoseexamples. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy.

Precious Metals Report- Wednesday, Dec. 19, 2012

Singapore INTS: +656309 1010 / Dubai INTA +9714 447 8510 / London INTM +44 20 7220 6010New York INTL +1 212 407 5102 / Orlando INTO +1 407 741 5332

Report Date 18-Dec-12

OTC Gold Silver Platinum Palladium

New York Close 17-Dec-12 $1,697.40 $32.2300 $1,608.25 $698.05

Asia Open 18-Dec-12 $1,697.00 $32.2500 $1,607.00 $696.00

High Bid 18-Dec-12 $1,702.80 $32.5200 $1,614.50 $700.75

Low Offer 18-Dec-12 $1,669.90 $31.5800 $1,593.70 $690.80

New York Close 18-Dec-12 $1,669.90 $31.6190 $1,593.70 $690.80

Daily Change USD -$27.50 -$0.6110 -$14.55 -$7.25

Daily Change % -1.62% -1.90% -0.90% -1.04%

London Fixings AM 18-Dec-12 $1,699.50 $32.3800 $1,610.00 $700.00

PM 18-Dec-12 $1,694.00 $1,611.00 $697.00

COMEX/NYMEX

Active Month 18-Dec-12 $1,670.70 $31.6690 $1,593.70 $690.95

Previous 17-Dec-12 $1,698.30 $32.2800 $1,608.50 $698.30

Daily Change -$27.60 -$0.6110 -$14.80 -$7.35

Daily Change % -1.65% -1.93% -0.93% -1.06%

EFP's $ 18-Dec-12 0.80/1.10 0.05/0.07 0.00/1.00 0.15/1.15

OTC Forwards & Options 1 Month 3 Months 6 Months 12 Months

GOFO 18-Dec-12 0.34200% 0.39400% 0.46000% 0.49200%

SIFO 04-Dec-12 0.70000% 0.65000% 0.60000% 0.50000%

USD LIBOR 18-Dec-12 0.21070% 0.30900% 0.50850% 0.84250%

Gold ATM Vols 18-Dec-12 11.00% 12.25% 14.00% 17.00%

Silver ATM Vols 18-Dec-12 21.25% 22.50% 23.50% 25.50%

Written by Edward Meir Tel: +1-203-656-1143 Email: edward.meir@intlfcstone.com

The information contained in this table has been taken from trade and statistical services and other sources which we believe to be reliable. INTL FCStone does not guarantee that suchinformation is accurate or complete and it should not be relied for pricing and/or trading decisions.

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PRECIOUS METALS REPORT - PAGE

Commodity trading is risky and FCStone Group, Inc., INTL FCStone Inc., and their affiliates assume no liability for the use of any information contained herein. Neither the informationnor any opinion expressed shall be construed as an offer to buy or sell any futures, options on futures contracts, or OTC products. Past financial results are not necessarily indicativeof future performance. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to thoseexamples. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy.

Gold Nearby Continuation

Silver Nearby Continuation

Platinum Nearby Continuation

Source for Charts: Esignal/Futuresource.com

For his part, Speaker John Boeh-ner told reporters he is hopeful thata compromise will be reached, butadded that President Obama hasyet to offer a plan that makes sense.Boehner said his calculations showthat Obamas latest offer is for $1.3trillion in tax increases and $850 bil-lion in spending cuts, and insists thatmore needs to be done on the lat-

ter side. More importantly, Boehnerstax cut-off is at the $1 million mark.

Should the impasse persist, thespeaker has announced that he isprepared to proceed with Plan B,which would involve voting on legis-lation that would extend current taxrates for all people earning $1 millionor less a year and deferring spend-ing cuts and entitlement reform to alater date. A vote on this is sched-ule on Thursday by the House, butit will likely go nowhere in the Dem-

ocratically-controlled Senate. Theproposal was also rejected by theWhite House which, incidentally, putup a similar proposal a few weeksago when it urged the House to voteand approve a tax increase on thosemaking $250,000 or more, a mea-sure that already passed in the Sen-ate.

Whatever the case, Tuesdays bear-ish action in gold, coupled with thebullish action in US equities, sug-gests that investors are expecting a

deal as being more likely than a fail-ure. If we do get a deal, we may seeone more nal sell-off in gold thatcould conceivably take the complexdown to $1650 and possibly down to$1630, both next support levels onthe charts.

Technicals also suggest we havemore room to go on the downside.In this regard, although golds RSIis at an oversold level of 35, it is stillnot in extreme territory. Moreover,gold is dangerously close to its 200-

day moving average of $1663, andalthough it briey took it out on Tues-day before snapping back, we wouldnot rule out another test (and break)on a subsequent attempt.

With regard to US macro news, aDecember condence gauge rose inDecember to its highest level since

April 2006, with the National Asso-ciation of home builders housingindex rising to 47 from a downwardlyrevised 45 in November.

Palladium Nearby Continuation

Support levels at$1650 and $1630

The $30.50 levelseems to benext support onsilver (red line).

Palladium may be onthe verge of takingout its uptrend line (in

blue).

RSI readings- gold still not severely oversold

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PRECIOUS METALS REPORT - PAGE

Commodity trading is risky and FCStone Group, Inc., INTL FCStone Inc., and their affiliates assume no liability for the use of any information contained herein. Neither the information

nor any opinion expressed shall be construed as an offer to buy or sell any futures, options on futures contracts, or OTC products. Past financial results are not necessarily indicativeof future performance. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to thoseexamples. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy.

Out of Europe, ECB chief Mario Draghi said that the central bank expects a beginning of a recovery in the second partof next year. There was even good news out of Greece for a change, with Standard & Poors lifting Greeces bond ratingfrom selective default to B- with a stable outlook, with the rating agency citing the package that was approved earlier inthe month and the stated resolve of the Europeans to stand behind the country. Both items played a part in strengtheningthe Euro, which soared to a high of $1.3238 on Monday, although it did little to stem the sell-of f in gold.

In other news, HSBC raised its platinum price forecasts for 2013 and 2014 citing a supply decit in the complex. The bankincreased its 2013 average forecast to $1,710 an ounce from $1,625 and sees the metal averaging $1,800 in 2014.

Right now, we are higher in the precious group, with gold up by about $4/ounce, but we suspect we could see the marketweaken again, particularly if the two sides in Washington continue to make progress. Base metals are down slightly, asso is energy. The Euro is a touch weaker, as is the yen, now pushing towards 84.50 against the dollar.