GOLD / SILVER
Apparently a slightly lower dollar, ongoing optimism from equities and higher oil prices has provided a positive initial start to the Wednesday gold and silver trade. However, the Federal Reserve open market committee meeting is scheduled to end early this afternoon and it is possible the bull camp in gold and silver could be disappointed by the outcome. Like the gold market, the silver market is also likely to face increased volatility today, with the lack of actual movement by the Fed likely to send prices quickly back toward last week’s consolidation low.
PALLADIUM / PLATINUM
While the big range up extension and multi month high move yesterday in palladium enhances the bullish chart set up, we suspect that positive economic psychology, higher global equities and positive Chinese economic data will be required daily for prices to continue to rise and regain the $2500 level. While not as direct of an impact, we suspect favorable Chinese data helps to improve demand expectations for platinum especially with the prospect of increased Chinese jewelry demand for platinum.
The mantra of strengthening in the Chinese economy goes hand-in-hand with expectations for improved Chinese copper demand and the overnight headlines have added to that bullish condition. In addition to news that Chinese August refined copper output increased by 9.7% versus year ago levels, the trade also saw news that Chinese domestic air travel has returned to “normal”.
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