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Disjointed Early Action in Metals


Gold and silver might be poised to receive outside market support from firming coal and Iron Ore prices in China, as that suggests the foundation of inflation remains in place despite the recent let down in commodity prices.  In the silver market, a similar reversal on the charts as in gold shifts control back to the bull camp. However, silver is likely to be much more reliant on risk on sentiment flowing from equities than gold especially given the silver markets recent focus on classic physical commodity market fundamentals.


It goes without saying that the bull camp in palladium will need further equity market gains to extend yesterday’s short covering bounce into a “buying trend” by the speculators. A very modest addition to the bull case in palladium came from Commerzbank forecast of an average 2021 palladium price of $2,575. On the other hand, September palladium should be limited by the June spike low up at $2,452. Like many other commodities, the platinum market probably needs another session of risk on sentiment in equities and physical commodities to forge anything but a short covering extension.


Clearly, the copper market was lifted by big picture improvements in macroeconomic sentiment as the market on Monday was presented with evidence of a significant increase in copper production from Poland’s KGHM and yet prices rallied. While some traders remain skeptical on the status of Chinese copper demand, seeing Chinese coal prices return to the vicinity of all-time high prices and seeing iron ore prices surge from their recent washout certainly rekindles hope for improved Chinese copper demand ahead.

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