GOLD / SILVER
With another liquidation from a second favorable vaccine trial, we suggest gold and silver prices are getting closer to a more balanced (less vulnerable) flight to quality positioning. However, it is possible that some buyers on Monday were buying the break off the idea that US infection issues might become very precarious in the days ahead and some additional buying might be seen this morning off action in the Dollar which is starting to show signs of breaking down.
PLATINUM / PALLADIUM
The PGM markets outperformed the gold and silver markets on Monday with the platinum market surprisingly outperforming all precious metals markets to start the trading week. While it would seem premature for the platinum market to begin a long slow recovery against palladium prices and it would also seem premature to look beyond non-Chinese slowing because of the dual vaccine reports, that can’t be ruled out considering the 60 day upside breakout in platinum on Monday.
Given that copper prices have been driven higher almost exclusively by signs of ongoing Chinese copper demand improvement, the sharp rally to start the trading week appears to be justified by fresh Chinese data. In fact, the Chinese economic data was from heavy industrial activity which suggests a broad sector of the Chinese economy is indeed active. On the other hand, US manufacturing data Monday was disappointing, and traders are consistently ratcheting up their fears of a return to severe slowing in parts of Europe and the US.
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