GOLD / SILVER
The gold market starts the new trading week with an early reversal of a recent pattern of lower highs from last week. With the dollar in the early going falling within a few ticks of a 40 day low, it is possible gold and silver could see noted currency related buying later today. With the markets seeing improved odds of an agreement on an EU stimulus package of 2 trillion euros and chatter in Washington beginning to materialize on another package, equities and metals should be cheered. While the silver market last week did not finish in new high territory last week, the charts remain bullish and it is likely that silver will follow gold this week.
PLATINUM / PALLADIUM
In a change of pace, the palladium market continues to forge the most impressive action within the PGM complex. While it might be premature to suggest the inflow to platinum and palladium ETF’s last Friday was significant, we are now watching closely for spillover ETF buying from investment headline coverage of gold and silver ETF inflows over the past 6 months. So far, both platinum and palladium ETF holdings year to date are down, with total palladium ETF holdings sitting at a mere 465,894 ounces and platinum ETF holdings at a more substantial 3.2 million ounces. In palladium, with the strong finish last week and a minuscule net spec and fund long positioning in the COT report, palladium should have plenty of technical buying capacity in reserve.
While the copper market has managed to charge through a consistent barrage of bearish fundamental developments since the March recovery began fundamentals now seem to project a continuation of the correction that started last week. In our opinion the most significant negative facing the copper market is news that Chinese exchange warehouse stocks have virtually exploded upward over the last 3 weeks suggesting that some type of downshift in Chinese demand might have taken place.
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