GOLD / SILVER
As indicated already, the explosion in precious metals prices were the feature of the overnight trade, with a-number-of bullish arguments thought to be driving the complex higher. Apparently, the markets are of a mind that the solution to the US economic slowdown will be very elusive and that significant amounts of additional assistance will be needed as the world’s largest economy looks to have the longest battle against the virus.. Not surprisingly, investors also added to the bullish environment with news that Friday saw 1.76 million ounces purchased by gold ETF’s with a more astonishing purchase of 9.1 million ounces of silver by silver ETF’s.
PLATINUM / PALLADIUM
With a tremendously strong/impressive finish last week and further impressive upside follow through this morning, the palladium contract appears to be poised to make a quick sprint back up to the $2500 level. However, we also think that the palladium market is poised to exhibit significantly more volatility than platinum, with the range on Friday of $104 becoming a common occurrence. However, the palladium market has a very minimal net spec and fund long (the COT positioning is probably understated due to the $120 rally after the report was measured. While the platinum market did not finish last week strong, we see the potential for $1,050 trade in the next several weeks
If US/Chinese relations were not on the rocks, we suspect that the overnight issuance of another Chinese scrap copper import quota would have served to lift copper prices. Certainly, the copper market should draft some support from a solid German IFO reading overnight but as is usually the case, the focus of the copper market is primarily locked onto the ebb and flow of the Chinese economy.
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