GOLD & SILVER
While spot gold prices are nearing record highs with a resumption of fighting in Gaza, the twin bullish forces for gold and silver have shifted slightly negatively over the last 24 hours. Furthermore, support from flight to quality issues has been inconsistent and largely absent this year, thereby discounting residual lift from the war. Furthermore, gold and silver have recoiled sharply from initial strength overnight, short-term technical signals are in sell mode and the trade failed to fully embrace recent rumors that October and November gains were the result of consistent central bank buying.
With the overnight upside breakout extension, copper becomes the strongest industrial commodity on the board. Not surprisingly, copper was definitively supported by declines in daily and weekly exchange stocks overnight especially with the decline in Shanghai copper warehouse stocks of 9,729 tons pushing exchange stocks down to 26,149 Mt, which is a drop of 27% from last week. Although December is always a period of low inventories, this is the lowest we have seen since May of 2009. Copper prices broke decisively above their 200-day moving average overnight on the heels of a better-than-expected Chinese PMI reading which also favors the bull camp today.
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