Gold Positive Track

GOLD / SILVER

With a softer start in the dollar, higher Hong Kong and Shanghai gold closes and hope for supportive Fed dialogue, the gold market should have a slightly positive fundamental track to start today. However, prices early on were tracking in negative territory despite overnight reports that a smaller but more likely to pass stimulus package is under fresh consideration in Washington and that shows the bulls lack some resolve. Even more surprising is the potential that gold and silver thrust higher yesterday following news of forward progress in the front-running virus vaccine. If the focus of the gold trade has shifted back toward classic physical fundamentals, we would expect prices to rally on increased trading volume again today.

PLATINUM / PALLADIUM

Tight coiling action continues in the palladium market this morning with the market showing very little (if any) positive reaction to Wednesday’s strong data and more optimistic overall environment. In fact, one might have expected more strength in palladium given the risk on environment was given an added boost by positive vaccine news. Interest in palladium ETF’s remains virtually non-existent following a decline in holdings yesterday which in turn leaves holdings 18% lower on the year. In October platinum, the bullish reaction to yesterday’s upbeat macro developments was a little more definitive but the net gain relative to the Tuesday close suggests there is not a lot of bullish interest poised to jump into the market.

COPPER

In our opinion, the copper market was lifted yesterday by a rising tide of global macroeconomic optimism. With much stronger-than-expected US durable goods figures yesterday, this week’s sharp run up in equities, favorable vaccine news, ongoing declines in LME copper warehouse stocks, and renewed strength in other metals markets, copper should now have a strong foundation well above this week’s low of $2.9325.