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Risk-on Type Rally Today


While the gold market held up impressively last week the charts currently sits in a lower high and lower low pattern from the last 5 days of trade, and therefore the bull camp is fighting the technical condition. However, a significant reversal in the dollar and broad-based risk on psychology has lifted gold and the rest of the metals complex off fundamental reasons to start the new trading week.


Like many other physical commodity markets, the palladium market is bailed out of a big picture macroeconomic washout wave from last week because of the shift to risk-on this morning. Certainly, seeing US equities extend their recovery from last week will likely dampen recent selling interest. While we are impressed with gold’s capacity to stand up to a broad-based physical commodity liquidation wave last week, we are less impressed with the platinum market’s ability to hold up over the last 3 weeks.


Despite ongoing fears of Chinese strategic stockpile sales, the copper market has sharply extended last week’s late recovery rally and that sets the stage for a return to a trading range defined as $4.25 and $4.50. However, the flow of dialogue from the Chinese copper market is that prices continue to be an impediment to Chinese manufacturing exports and that the government should be expected to continue periodic Chinese strategic copper sales.

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