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Metals Vulnerable


We see a vulnerable position in gold and silver to start the last trading session of the week, with prices holding just above chart failure points, the dollar showing strength and a bit of global slowing fear prompting questions toward physical commodity demand. The gold market also starts out today under a bit of pressure following lower prices in Shanghai and India. Therefore, it is not surprising to see some divergence this morning between gold and silver, with silver showing signs of respecting consolidation support and possibly exhibiting less volatility than gold today.


ETF investment interest is small which in turn suggests palladium lacks a definitive bull story. Critical support is seen at $2,131.30 and in the event silver and gold dive sharply today, further downside targeting could be seen at $2,102.20. As opposed to palladium, the platinum market seriously damaged its charts yesterday with the lowest/breakout trade since August 3rd. However, the palladium market is showing a trend of growing interest in platinum ETF holdings, as they expanded for a 12th straight session yesterday and have a net year to date gain of 6.7%.


Despite another week of noted declines in daily LME copper warehouse stocks, persistent headlines predicting solid Chinese copper demand and news of the closing of a Chinese copper mining operation (due to operating losses and low quality ore) the copper market is signally more corrective action on its charts. Clearly the market wasn’t supported yesterday as-a-result of news that Rio Tinto revised its 2020 production guidance downward and therefore the focus of the trade appears to be centered on demand instead of supply.

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