Despite favorable Chinese services PMI readings overnight and generally higher global equity market action, the copper market has rejected yesterday’s
bounce and has broken below a key psychological $3.00 price level. Some traders suggest additional strength in the dollar increased US/Chinese trade tensions and
talk of a summer Chinese demand lull are dragging prices down.
GOLD / SILVER
The gold market starts the trading session out today under ongoing pressure from another pulse up move in the dollar and from generally positive global equity market action. It should also be noted that gold and silver are showing initial divergence which could be a sign that silver is attempting to detach from gold and assume a leadership role. In fact, Shanghai gold closed lower and Indian gold prices fell toward one week lows despite fears of escalation in US/Chinese trade relations and some economic uncertainty from the Fed’s Beige book which pointed out ongoing economic headwinds from Covid-19 hotspots.
PLATINUM / PALLADIUM
The PGM markets enter the trading session today with significant divergence with palladium sharply higher and platinum carving out very minimal gains. It should be noted that the primary South African electric utility has warned of upcoming power outages which in turn can impact PGM mining operations. On the other hand, platinum ETF holdings overnight jumped by a very significant 24,970 ounces bringing the year to date growth in holdings up to 9.2%. However, platinum prices have not responded to the noted strength in palladium this morning or to the investment news perhaps because the market continues to be tracking gold prices and safe-haven and financial factors.
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