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Dollar Strength Bearish to Metals


Gold set back overnight after a brief fling with the upside on Friday. While Friday’s move higher in the face of a stronger dollar was impressive, it could not maintain in the face of another move higher in the dollar overnight. The disappointing economic data out of China and China’s central bank cut unexpectedly cutting its key interest rate shows a weaker than expected economy, which lowers demand expectations for gold.

Money & Gold Bars


September palladium was dealt another setback overnight after the weak Chinese data raised concerns about auto sales and chip production. The weaker close on Friday following the upside breakout last week was also a disappointment, but the setback so far has been mild relative to the gains the market has made since mid-July. September palladium has gotten a bit overbought near term and it could see a correction back to $2,100 without doing much damage to the charts. October platinum has also gotten overbought following its steady uptrend off the July lows, and it too was sharply lower overnight.


Copper has likely seen the most consistent uptrend of the commodity market sector since mid-July, but a loss of upside momentum on Friday led to considerable downside follow-through overnight. Today’s July Chinese industrial production reading was lower than expected, and Chinese retail sales had a surprise downtick, both of which may show evidence of a slowing Chinese economy that weighs on copper demand. September copper finished Friday trading with a heavy loss and a negative daily reversal, but it still finished the week with a gain of 11.65 cents (+3.3%) for the third positive week in the past four.

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