GOLD / SILVER
With an upside extension in the dollar to start the new trading week, it is very surprising to see the gold market trading $7 higher and silver trading $0.15 higher. Perhaps the gold and silver trade are benefiting from a measure of flight to quality buying off fears that China’s Evergrande real estate giant is poised to default as some have labeled that company as a Chinese “Lehman”.
PALLADIUM / PLATINUM
Apparently, the palladium market is attempting to build a support level on the charts, with prices stubbornly rejecting sub-$2,000 pricing in each of the prior 3 sessions. Sentiment-wise, we can understand a bottom in a market which saw predictions of a “death cross” on the charts recently and a market that has possibly fully embraced disrupted auto production into next year. While the platinum market failed at the $950 level last week on active trading volume, the market has apparently managed to build a shelf above $921 but has been restricted by staunch overhead resistance at the $950 level.
With a partial Chinese holiday, a sharp fresh lower low for the move early in the Monday Asian trade and general economic/financial contagion concerns in the headlines, the path of least resistance in copper is down. In fact, projections of deflation and/or stagflation have surfaced recently, US and Chinese infections remain a problem, and the fear of a financial contagion hit for the Chinese economy are major negative for the copper market.
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