GOLD / SILVER
In a strange twist of historic fundamental relationships, the gold and silver markets today are under pressure because of rising inflation concerns flowing from a stratospheric rise in energy prices. In other words, the gold and silver trade are fearful of tapering by the US and might be psychologically undermined because of the New Zealand central bank rate hike overnight. Not surprisingly, with the increased expectations of US tapering (now as early as next month) the dollar has regained its footing and is approaching an upside breakout.
PALLADIUM / PLATINUM
Seeing the palladium market stand up yesterday and again this morning to very disappointing September US vehicle and truck sales readings from earlier in the week, suggest the market might be close to a “mostly liquidated positioning”. However, the US car and truck sales information from earlier in the week was clearly a blow to near term palladium demand expectations especially with light truck, passenger car, and total vehicles sold falling to the lowest level since May 2020. With a downside breakout (11-day low) the platinum market this morning is under pressure from gold weakness, dollar strength, and fear of inflation in Europe which in turn is a threat to diesel vehicle platinum feedstock demand.
In a development that highlights sagging demand hope for copper, the December contract failed at its 200-day moving average which in turn highlights a breakdown in bullish sentiment. On the other hand, we are surprised that copper has not fallen more aggressively considering a 2nd Chinese real estate company is rumored to have missed a debt payment.
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