GOLD / SILVER
While it is likely a function of subdued holiday trade, both gold and silver prices this week have settled into a tightening coil pattern which increases the potential of a fresh trend decision ahead. While the silver market has outperformed the gold market recently, that action might come at a price for the bulls, as the net spec and fund long in silver probably put the net spec and fund long at the highest level since February.
PLATINUM / PALLADIUM
Platinum prices forged another new high for the move and the highest price since December 7th overnight in a fashion that suggests a challenge of contract highs up at $1,096.50 is in the offing. In retrospect, the spike up, range up, definitive downside reversal in palladium on Monday and the markets lack of gains in the face of ongoing platinum strength, suggests palladium is vulnerable to further corrective action.
We are surprised that copper prices are tracking higher to start today, with further setbacks in surging industrial material prices in China (namely iron ore). While not as surprising, copper has also avoided selling pressure off the delay in the larger US stimulus package. However, the entrenched pattern of declining world copper exchange warehouse stocks provides a strong supply-side underpin for the bull market.
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