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A Key Pivot For Gold


With the dollar posting a 3-day low in the early going and disappointing US claims data from the US yesterday gold and silver bulls have seen selling interest moderate until the US nonfarm payroll report provides fresh direction. Since the gold market has not been benefiting from flight to quality issues for several years, seeing a run-on a US bank in Silicon Valley is of little consequence so far. However, bank news is not entirely negative for gold today with a Bloomberg article pointing out ongoing central bank gold buying with the latest purchases this week made by Singapore and Chinese central banks. Certainly, gold and silver could “weave” through today’s minefield of economic news from the US jobs front but from our perspective it is difficult to construct a series of readings resulting in an aggressive rally.

Gold ticker


The charts in the platinum market are bearish with prices this morning sitting just above a series of consolidation low prices bordered by $931 on the downside. However, fundamental information flow for platinum from both supply and demand perspectives has been supportive this week with a large deficit forecast and continued signs of investment interest. Even though the PGM markets have generally delinked with gold and silver recently, the potential for a major macroeconomic volatility event today could reestablish linkage of all commodities. Despite palladium rejecting a new low for the move yesterday and respecting that low again this morning the charts clearly remain bearish.


While we are not surprised to see copper prices trading lower this morning following across-the-board weakness in global equity markets, we are surprised to see prices lower in the wake of a very material 26,008-ton outflow from the weekly Shanghai exchange copper warehouse report. Furthermore, the market seemed to discount a larger than expected Chinese new loan reading for the month of February. We suspect copper prices are under modest pressure from fears of higher US rates and a surging dollar if today’s payroll reading is anywhere near as strong as last month.

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