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Soft WGC Q3 Demand


At least in the early action the gold contract waffled around its 200-day moving average and around the psychologically important $1800 level. Overnight the World Gold Council indicated global demand for gold declined in the 3rd quarter to the lowest level since the 4th quarter of 2020, with the loss of demand the largest in the investment area.


Both palladium and platinum came under aggressive liquidation pressure yesterday as the outlook for the global economy was downgraded and GM comments confirmed that the chip shortage is still restricting vehicle production and therefore limiting demand for palladium. It is also likely that a contraction in US durable goods sales deflated demand expectations for the PGM markets, while a $2.00 washout in crude oil prompted selling in many physical commodity markets.


While we would not attribute a large portion of yesterday’s sharp slide in copper prices to the noted weakness in iron ore and aluminum prices in China, seeing sharp declines in crude oil on top of the declines in other key industrial material prices gives the bear camp confidence heading into the 4th trading session of the week. In fact, aluminum, Iron Ore, and crude oil are lower again today thereby emboldening the bear camp.

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