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More Consolidation Ahead


In addition to last week’s short covering spillover, the gold market is drafting support from increased political uncertainty in Afghanistan and economic uncertainty from disappointing Chinese economic information. Apparently last week’s washout debacle has been largely forgotten by the trade as gold prices into the close on Friday had regained more than $100.


The charts in the palladium market to start the week are negative with the market seemingly poised to forge a 4-day low in the early going. Strength in equity prices last week and ongoing recovery action in gold combined with a very poor finish last week in the dollar failed to result in gains in palladium. With last week’s significant volatility in platinum, it appears that platinum is tracking tightly with gold instead of with classic physical commodity market developments.


While the copper market appeared to be in an upward track following the early August washout, disappointing economic news from China overnight has deflated optimism and emboldened the bear camp early today. On the other hand, copper prices should be supported because of a Russian export tax increase on copper and other metals but also because of a strike at a Codelco mine in Chile.

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