GOLD / SILVER
Despite building a strong head of steam into an 8 year high yesterday it appears as if the $1800 level stopped the gold rally dead in its tracks. Surprisingly the gold market was not lifted by the weakness in US equities yesterday or by the surging US infection counts in a growing list of states (largely in the West). While some will suggest that renewed strength in the dollar was behind the reversal we would suggest that was a minor contributing factor.
PALLADIUM / PLATINUM
The charts in the palladium market were damaged yesterday with prices remaining near yesterday’s lows this morning (which were the lowest in 14 days). Obviously renewed fears of economic slowing from the virus spread in the US is seen as an indirect demand threat for PGM consumption from the auto sector, but it is also possible that strength in the dollar and spillover selling from the gold reversal are the key driving forces.
While it would appear as if demand threats against are returning there would also appear to be fresh prospects supply risk in Chile from fears of shutdowns due to ongoing infection spread. In fact mining unions in Chile have requested a 2 week shut down for cleaning following infections at a key mine. On the other hand, overnight news saw a prediction that Peru’s largest copper mines will reach back to full capacity next month.
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