Selloff in Gold and Silver

GOLD / SILVER

Clearly the $1900 level has failed as support and it is possible that December gold is now on a direct path to return to $1850. The initial driving force behind the selling in gold and silver this morning, is likely the fresh upside breakout in the dollar but news of another net selling day of gold and silver ETF holdings probably adds to the deteriorating view toward both markets. The silver market is also under ongoing liquidation pressure this morning with physical demand fears likely the primary force behind the slide but spillover pressure from gold weakness and selling from a rising dollar providing adding negative force.

PLATINUM / PALLADIUM

It is apparent that residual spillover pressure from gold weakness and dollar strength leaves the environment for Palladium generally bearish. While the outlook toward the Chinese economy remains positive there are several anecdotal stories this week that have pointed to a temporary pause/catch up in the Chinese economy, as the government is thought to be taking stock of the impact of their initial stimulus moves and in many cases buffer stocks have now been returned to normal levels creating fears of a pause in physical buying. About the most positive thing that can be said about platinum today is that it has temporarily respected $850 pricing which in the past has been a key pivot point.

COPPER

While the bull camp should be emboldened by yesterday’s capacity to trade most of the trading session in positive territory, we get the feeling that this week’s highs will be solid resistance until the depth and breadth of the UK lockdown is known and or there is some fresh confirmation of ongoing Chinese growth.