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Metals Higher on Weak Dollar


With another sharp pulse up move today resulting in a 5-day high in gold and silver, the severe beating from last week is beginning to drift out of market consciousness and renewed bullishness is populating the headlines again. While weakness in the dollar has been supportive of gold and silver recently, we do not feel the currency impact has been a primary driving force yet. However, with a fresh contract low in the Dollar index this morning it would appear as if the May through late July down trend in the Dollar has resumed and that could step up currency related gold buying interest again.


While the charts in the palladium market have shifted bullish this morning the charts give off the impression of a market poised to “grind” higher and only with very definitive assistance from strength in gold and silver prices. While palladium ETF’s did see an inflow yesterday, investors have not shown notable interest in the vehicles and therefore platinum prices will continue to be primarily driven by futures news and by futures price action.


With a fresh higher high for the move the copper market has managed the first 2-day trade above downtrend channel resistance since the peak back in early July. In addition to favorable Chinese purchases of US grains and energies and given fresh Chinese liquidity US copper is given additional lift by a fresh contract low in the US dollar. In yet another supportive angle, copper continues to see lift from significant strength in zinc and nickel prices which are rising because of a surging Chinese steel industry.

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