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Metals Under Pressure


The carnage in the gold and silver markets looks to extend for another trading session today with the negative view toward all commodities present in the early action today. Certainly, the key driving force for pressure in gold and silver is the definitive push higher in the dollar which overnight forged another fresh higher high and reached the highest level since July 24th.


On one hand, the ability of palladium to hold up in the face of a massive washout in gold and silver and manage to hold up in the face of abroad-based physical commodity market/equity market liquidation suggests that the impetus to press prices lower is lacking. Palladium ETF holdings yesterday increased by 1,458 ounces but remain 18% below the level seen at the beginning of the year. The platinum market is being dragged down sharply by gold and silver and the physical commodity market washout with the next downside targeting level seen at $837.50.


Like other metals markets, the copper market failed at key chart support levels yesterday and that in turn shifts the technical condition of the market in the favor of the bear camp. With very significant weakness in other industrial base metals prices and signs that Chinese consumers remain cautious, the idea that China is “pausing” purchases of physical commodities is given added credence and that hits copper very hard because of its infatuation with Chinese demand.


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