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Copper Supply Tightening in Chile


With a rejection of weakness and a recovery at the end of last week, the gold bulls would appear to have signaled the capacity to control off spiraling US virus counts. However, the gold market has also shown signs of faltering from fears of slowing physical demand over the past 2 weeks and therefore the gold market today starts the week facing an important pivot point.


The palladium market saw a significant high to low washout last week of $135, and the trend would look to remain down in the wake of last week’s reversal down in US equities and against the prospects of widening US regional lockdowns. Downtrend channel resistance in September palladium is seen at $1,946.10 and that resistance point falls down to $1,914.50 by Friday.


The headlines over the weekend pointing to further infection spread among miners in Chile ratchets up a pre-existing fear of supply tightening even further. In fact the union representing the workers in Chile, indicate that 2000 virus cases have been seen, which in turn produced an infection rate of 2.7% of all workers. So far the Chilean copper mine involved has been able to keep production running with “skeleton crews” but the unions are pushing for tougher rules including periodic closures for disinfection.


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