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Metals Market Outlook


Clearly bullish forces are back in control of precious metals this morning, with gold prices breaking out into new high ground again and silver prices showing noted gains off yesterday’s low of $1.30! Traders should see strong Chinese PMI readings and more gains in Chinese equities as a signal of more improvement in the Chinese economy, which in turn should reverse very dismal physical gold demand patterns in China. While the silver charts and fundamental issues are less supportive of the bull camp in silver than in gold new all-time highs in gold, a huge inflow to silver ETF’s yesterday, new lows in the Dollar and a bullish shift in the silver charts rekindles upside potential this morning.


While palladium prices have bounced this morning and new record highs in gold should lend support, the aggressive breakdown on the charts this week is very disappointing to the bull camp. In a similar fashion, the platinum market ranged down sharply yesterday and in the process the market severely damaged its charts and fundamental psychology in the process.


The action in the copper market this morning suggests the bias in prices today is down particularly with the market unable to track higher following better-than-expected Chinese PMI data. Yet another modest negative for copper prices today is the fact that weekly Shanghai copper stocks posted another inflow which many see as a surrogate for near term physical demand pattern in China.

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