GOLD / SILVER
We continue to think that gold and silver will be tightly correlated with big moves in equities. News that Germany was poised to put aggressive restrictive measures back in place to control infection spreads, has prompted a serious deterioration in psychology around the world with selling spilling seen in many physical commodity markets off physical demand fears. In other words, a deflationary environment has returned with selling in gold and silver magnified by strength in the dollar.
PALLADIUM / PLATINUM
While the overall market condition this morning favors selling of palladium, the market has held up impressively despite renewed deflationary fears, weakness in gold and a higher dollar. Perhaps palladium is garnering some support from the fact that Shanghai equity markets rallied but the global trend of selling leaves a weight hanging over palladium. However, platinum fundamentals are simply not strong enough to lift prices consistently without a near term announcement of a successful vaccine or a signed stimulus deal and neither of those developments are likely in the short term.
Not surprisingly, the bias in copper is down in sync with other physical commodities but also because of analyst projections of a slightly disappointing Chinese PMI manufacturing report.
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