GOLD & SILVER
The US economy’s relative strength against other major economies is keeping the dollar strong and expectations for an aggressive Fed intact. This could put additional pressure on gold and silver today. The gold market followed through on yesterday’s declines overnight but managed to hold above last week’s lows. That level, $1,699.10, could be a key bear/bull line today. Gold appeared to give up on its two-day rally yesterday after the dollar rallied to a new 20-year high and bond and notes traded to new contract lows. The dollar climbed to a new high overnight and is holding onto those gains this morning.
Platinum rallied sharply yesterday and held its gains overnight in defiance of the strong dollar and relatively weak gold market. Platinum has followed gold in the past, but it seems to be setting its own course this week. The market faces similar obstacles that gold and silver do, with underlying dollar strength and competition from interest bearing instruments undercutting investment interest.
Copper prices have been able to overcome Chinese demand concerns so far today, but further upside may be limited unless there is a significant turnaround in global risk sentiment. After falling to a new six-week low early yesterday, December copper regained upside momentum and went on to post a moderate gain on an outside-day session. The market has held a tight range so far today and is showing a mild loss this morning. China’s August unwrought copper imports were 26% above last year’s levels, but overall imports came in lower than trade forecasts, which casts a shadow over the market.
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