GOLD / SILVER
With gold and silver prices adding to Friday’s strength it would appear as if some flight to quality buying is moving into the market ahead of the US election. Clearly, the unending infection spread in Europe is hovering over the precious metal markets and a deflationary wave of selling could be seen at any time if the US joins Europe in a wave of lockdowns. However, it should be noted that gold and silver prices are climbing against strength in the dollar for a 2nd straight session indicating a slight change of market focus.
PALLADIUM / PLATINUM
While it would appear as if the palladium market has found some form of support at the $2,200 level, it should be noted that the washout last week was on heavy volume and little change in open interest and therefore fresh sellers might be offsetting some of the long liquidation. Additionally, big picture global (non-Chinese) macroeconomic forces should continue to apply pressure to palladium despite news that the Chinese long-term plan from last week provides significant stimulus which in turn should boost Chinese demand for palladium. Cushioning the platinum market is the likelihood that last week’s declines (after the COT report was measured) puts the net spec and fund long down to the lowest level since June 2019.
The copper market last week failed to benefit from a series of very positive long-term infrastructure spending goals released from the Chinese national leadership planning council and the market this morning hasn’t benefited definitively from better than expected Chinese manufacturing PMI readings for October. However, the copper market failed to benefit from a series of positive US scheduled data points last week probably because big picture election/infection issues continue to threaten near term physical demand views.
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