GOLD / SILVER
Obviously gold and silver were short-term technically overdone following yesterday’s explosive follow-through rallies and therefore a measure of corrective action early today is not surprising. Furthermore, a bounce in the dollar and signs that Congress might be laying the groundwork for a temporary extension of US funding and possibly reducing the amount of stimulus, is justification to remove some of the premium gained this week.
PLATINUM / PALLADIUM
With another new high for the move in April platinum yesterday and weakness in the palladium market, it-would-appear that the long platinum/short palladium spread is back in vogue. From a technical perspective, the rally in platinum continues to be accompanied by a rise open interest (the highest since March) and it is possible that the strong price action in gold and very dovish global central bank dialogue this week is bringing in fresh capital to the platinum market.
While the copper market has rallied $0.14 from this week’s lows into this morning’s highs, the rally is justified by a-number-of fundamental developments. In addition to a sweep of notable daily LME copper warehouse stock declines this week, the Shanghai copper stocks also fell by 7,870 tons leaving total global copper exchange stocks near 7-year lows! We also suspect copper saw buying off projections from Goldman of the beginning of a commodity super cycle, but also because of unrelenting new highs in coal and iron ore prices in China.
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