GOLD / SILVER
Surprisingly, the gold and silver markets are starting out on a positive foot this morning despite new contract highs in the December dollar index. However, the gold and silver trade are probably taking some badly needed solace from a slight tempering of US treasury rates especially after the Royal Bank of New Zealand raised interest rates overnight. Today, the precious metal markets will be confronted with a veritable avalanche of US scheduled data, many of which could send the dollar rocketing even higher.
PALLADIM / PLATINUM
While the World Platinum Investment Counsel has an agenda to support platinum, overnight they predicted demand for platinum will rise by 20% next year mostly because of demand rotation from palladium to platinum in auto catalyst fabrication. Certainly, it is a very slow process of shifting product inputs but the wide differential between palladium and platinum prices sustained over several years could finally be starting substitution. Currently, palladium prices are roughly double platinum prices which many suggest is a function of the substitution formula.
With another higher high for the move early today in December copper, it is possible the copper market is drafting strength from rising nickel, zinc, and other base metal prices, as that action follows a jump in iron ore prices in China earlier this week. Clearly, the copper market bucked the trend in many physical commodity markets yesterday with a rally. In addition to hope of Chinese stimulus, the copper bulls were assisted by ongoing supply threats arising from the political environment in Peru.
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