GOLD / SILVER
Apparently the gold and silver markets are extending positive price trends from last week with early gains today in the wake of news of fresh activity restrictions in portions of Europe and in the US states of Michigan and Washington. Certainly, it is possible that weakness in the dollar is providing some added lift, but that influence is unlikely to be significant as the dollar remains within the last 8-days consolidation with support significant just below the 92.50 level.
PALLADIUM / PLATINUM
Palladium prices did stabilize after last week’s initial washout, but we suspect bearish big picture sentiment will leave pressure on prices into this week. In fact, the palladium market over the past several months has not shown a tight correlation with the positive flow of Chinese economic data (which in turn is thought to facilitate auto sales and demand for auto catalyst) but this week will start out with a series of very important Chinese economic data. Surprisingly, the platinum market appears to be in a better position than palladium from its charts and from a lack of direct selling pressure in the face of recent slowing/deflationary type headlines.
Not surprisingly, the copper market has flashed to 2 1/2-year highs in the early going today following favorable Chinese scheduled data. Seeing Chinese industrial production in October up 6.9% over year ago levels apparently offsets a slightly less robust than expected retail sales reading for October which gained 4.3%. However, in a surprising addition to the Chinese copper demand story, Japan posted a much larger than expected capacity utilization gain of 6.4% for September while industrial production in Japan in September on a month over month basis gained by 3.9%.
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