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Gold And Silver Vulnerable


Despite headlines this morning touting significant outflows from gold and silver ETF’s last week, prices have started out positive as-a-result of a broad risk on market environment. Obviously, a downside breakout in the dollar (to the lowest level since January 27th) has contributed to the positive early traction. Like the gold market the silver market maintains a relatively modest net spec and fund long relative to the last 23 months.


In what could be very significant fuel for the bull case, platinum ETF holdings on Friday saw an inflow of 27,917 ounces (one of the largest single day inflows we can remember) which brings the net gain in platinum holdings this year up to 2.2%. As we expected, the palladium market is being “dragged” higher by significant gains in platinum and at times palladium could see pressure as-a-result of long platinum/short palladium spread trading.


With Citi predicting London copper to trade at $10,000 (recent price $8437 a ton and at an 8-year high already) and suggesting the strength would result from a “deep global deficit, prices are justified in their noted strength today.

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