GOLD / SILVER
While interest rates have not declined, and the dollar remains near the upside breakout point, gold and silver prices have rallied sharply which in turn suggests “technical short covering” is in play. In fact, the magnitude of the gains this morning in gold, silver, and palladium are outsized compared to action in other physical commodity markets following the Fed tapering announcement.
PALLADIUM / PLATINUM
While the PGM markets came under significant selling pressure ahead of the Federal Reserve outcome yesterday, they were likely falling in sympathy with large declines in gold and silver and not because of internal market issues. Fortunately for the bull camp in platinum, US gas powered vehicle sales are not as important to platinum demand expectations as they are in palladium.
The copper market forged a wide 13 cent trading range yesterday ahead of the US Federal Reserve meeting outcome and finished higher turns the charts minimally in favor of the bull camp today. While copper failed to benefit from a sweep of favorable US scheduled data yesterday (including factory orders), the weakness yesterday was not surprising considering that a top Chinese official early Wednesday warned against increased downside pressure on the Chinese economy ahead.
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