GOLD / SILVER
At least to start today, the bias in the gold market is pointing down with the dollar showing a slight recovery, the trade somewhat overdone from the Fed reaction yesterday, news that Indian gold demand declined 70% in the 2nd quarter (to an 11 year low) and lower gold price action in the Hong Kong market. It should be noted that the World Gold Council overnight indicated they now expect Chinese gold jewelry demand to begin to recover as there are no pandemic related lockdowns in China. Unfortunately for silver bulls the prospect of significant two-sided volatility remains very high with silver potentially threatened more than gold through today’s US initial claims report.
PLATINUM / PALLADIUM
The trading range in the palladium market so far this week has been very extensive and fresh significant damage this morning leaves the bear camp in control. Therefore, the charts favor the bear camp in palladium with the market seemingly falling back into a classic physical/industrial commodity stance fearful of further economic deterioration. The platinum market is also encountering very negative chart action early and clearly failed to benefit from the initial strength in gold and silver prices this week and that would seem to suggest it is off balance because of concern of softening industrial demand following the inability to put down the 2nd wave of virus infections.
With a risk off vibe flowing from global equities, higher production from a Russian miner, negative demand chatter from Southeast Asia and a long list of countries producing disconcerting infection spread news overnight the bear camp has a slight edge to start today. Apparently KAZ Minerals managed a first half copper production increase of 4%, in a development that counters widely held copper market expectations that the virus lockdowns impaired global production.
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