GOLD / SILVER
With the dollar forging the lowest trade since September 20th early today, ongoing hope for a US stimulus package, a reduction in gold production by a key producer and bullish fund manager views toward gold gives the bull camp the initial edge today. While the slide in the dollar is certainly helpful for gold and silver bulls, we doubt the Dollar will be a primary force driving metals prices sharply higher.
PALLADIUM / PLATINUM
The action in the palladium market on Tuesday was very impressive and with prices maintaining the gains overnight, that should put the bear camp back on its heels again today. Clearly, the extension of the deadline for the US stimulus provided some of the lift in palladium. The January platinum contract failed to replicate the strength seen in the palladium market yesterday with the platinum market seemingly held down by its 200-day moving average at $881.40. However, platinum did make a fresh 5-day high this morning but appears to be hung up by the 200-day moving average.
A portion of the trade suggests that yesterday’s aggressive rally and today’s follow-through gains are the result of additional strike news in Chile, but we also think a decline in 3rd quarter copper production from Antofagasta is adding to the buying trend. The Candelaria copper mine in Chile apparently halted operations at midnight to protect its workers among the strike and protests after 2 striking unions blocked access points to the mining facility.
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