Palladium Lifted by China

PLATINUM / PALLADIUM

While it is very difficult to confirm, it is possible that palladium is once again being seen as an attractive alternative to gold considering its general precious metals classification. However, it is more likely that palladium is being lifted because the ongoing recovery in China is starting to foster chatter than Chinese auto sales have turned up thereby increasing auto catalyst demand. Platinum should also catch some minor lift from a threat against South African production because of the potential for power issues. The primary South African electric provider has not invoked brownouts and blackouts yet, but it would appear as if the company has warned of problems.

GOLD / SILVER

While gold and silver prices did not benefit from the massive washout in US equity markets yesterday there would appear to be some flow into gold this morning because of signs of additional selling in equities from Asia. However gold and silver are likely benefiting early on from signs that the dollar rally is fizzling. If there is a primary supportive overnight development it is news that Indian gold imports in August expanded to 35.5 tons which is 10 tons above the prior month and nearly triple the low water mark of imports of 14.8 tons earlier this year.

COPPER

While the copper market has held above yesterday’s spike low washout this morning the overnight headlines are not particularly supportive of the bull case. Certainly, there continues to be talk of ongoing economic recovery in China which in turn should keep copper demand strong but seeing a weekly Shanghai copper warehouse stock build with a flow of 6787 tons on the week isn’t exactly what the bull camp had hoped for. Nonetheless, world exchange stocks of copper remain supportive of prices with LME copper warehouse stocks approaching 15-Year lows.