GOLD / SILVER
Gold and silver prices this morning started out on a positive footing with the slow grind toward a stimulus package likely serving to lift prices back toward this week’s highs. However, the precious metals markets do not appear to have a large amount of bullish buzz in place with the very poor performance in the month of September reminding the bull camp of the continuation of the “downtrend” that began in early August. While both gold and silver ETF’s saw inflows yesterday the magnitude of those inflows were anemic and without a sustained pattern of larger inflows the investor angle is unlikely to be considered a key bullish force in the trade.
While the palladium market surprised the trade with a higher high and positive action yesterday despite weakness in many other precious metal markets and have fallen back this morning which has dampened bullish sentiment. With the palladium market showing weakness and the platinum market showing strength yesterday, we suspect that a reversal of long palladium/short platinum spread trades is now in motion and that action looks to benefit platinum again today. In other words, we do not see the rally in platinum as a fundamentally driven rally.
Despite China on holiday, a series of massive single day inflows to LME copper warehouse stocks earlier this week and a lack of an agreed-upon US stimulus package, copper prices have forged a fresh higher high for the move and the highest price since September 23rd.
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