Sloppy to Lower Gold Market

GOLD / SILVER

With a slight recovery in the US dollar, slightly higher US treasury yields and a good measure of risk off flowing from commodities and global equities, the gold market looks to have technical and fundamental resistance at the $1800 level to start the new trading week. Like the gold market, the silver market also forged a downside extension and aggressive rejection/recovery of a sub $22.00 trade. It should also be noted that the $22.00 level has been very credible support since late September, with that level potentially a long-term value zone.

PALLADIUM / PLATINUM

While the PGM markets have not paid much attention to classic inflation signals (like CPI and PPI), this week could bring a key test of the focus of the markets following an avalanche of inflation reports. In other words, platinum and palladium have not shown a tight correlation with gold and silver prices, but that relationship might manifest itself later this week. While UBS sees a PGM price recovery in 2022, analysts there prefer platinum over palladium because of substitution of cheaper platinum for palladium.

COPPER

We continue to see the copper market caught in a trading range defined as $4.31 and $4.49 with that range enclosed by a larger range of $4.20 and at $4.53. In a limiting development Chinese copper production is expected to remain high with a month over month gain in December of 5.4% resulting in a net gain for the year of 1%. In fact, some traders are suggesting China could export some copper which in the current condition would likely shift copper prices back down toward the bottom of the consolidation channel.