GOLD / SILVER
While the US dollar has not forged an upside breakout overnight it remains within ticks of a fresh high, and gold and silver have likely seen a portion of their selling this morning off that situation. While today’s initial weakness is probably part of a risk off/fear of renewed slowing (from jumps in various global infection readings), investors have continued to pull back from both gold and silver ETF’s.
The charts in palladium market finished last week extremely bullish but embracing the bull case is difficult with classic longer-term fundamentals supporting the bull case still fuzzy and short term influences this morning bearish. In fact, without labor or Covid interrupted mine production event, the key force behind the rally in palladium appears to be the hope for improvement in global auto sales and therefore increased global auto catalyst input material in the 2nd half of this year.
In retrospect, the action in the copper market over the last 45 days is clearly justified by the events from both scheduled data and from the global virus situation. From a 10,000-foot overhead view, it-is-clear that Chinese growth moderated or plateaued or temporarily paused around their New Year’s holiday.
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