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Choppy Action, Upside Momentum Waning


While the February gold contract did manage a 7-day high overnight, the breakout up was very modest and failed to hold initially. However, the market should draft support from news that Indian December gold imports increased by 5.4%. Once again, the gold and silver bulls were disappointed by the lack of definitive lift from another downside extension in the US dollar.


There is little reason to change our view of further consolidation action in the PGM markets. In fact, we are hesitant to label the sideways action in March Palladium in early January as a “coiling” pattern as that insinuates the potential for a definitive “move” in prices. Similarly, the platinum market also remains mired in a trading range bound by $1,004.80 and $919.50.


The copper market continued to correct from the explosive rally on Wednesday but respected and rejected the $4.50 level again overnight. Apparently spot demand surfaced perhaps signaling the $4.50 level is a value zone in the near term. In minor negative outside action, nickel and iron ore prices have softened but the copper market is supported because of news that Chinese copper ore and copper concentrate imports in December increased with a 7.6% year-over-year gain.

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