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Gold and Silver Extend Rallies


Both gold and silver prices have started the new week out with extensions of last week’s rally, with fresh higher highs. Bolstering the bull case is an ongoing “relative calm” in US politics, signs of Chinese growth from imports/exports, a residually low US dollar and reports that Chinese gold consumption in the 3rd quarter recovered significantly. Like gold, the silver market will clearly track the direction of global equity markets and will likely need an uptick in Chinese inflation later this week or favorable vaccine news to spike up to $27.90.


Like gold and silver, the palladium market broke out up on the back of a decrease in US political uncertainty last week. It should also be noted that the rally at the end of last week was forged on two days of heavy volume, thereby giving credence to the potential for further gains this week. While the platinum market returned to the vicinity of critical downtrend channel resistance from the August high last week, it clearly underperformed the rest of the precious metal markets.


With the passing of the US election an agreement between Codelco and a major Chinese buyer (with respect to treatment charges for 2021 purchases), Chinese steel prices hitting the highest since July of 2019 and strong Chinese import/export data it is clear that the potential for stronger Chinese copper buying remains in place.

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