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Washout in Platinum Prices


While gold could have benefited from reports from Bank of America suggesting gold funds saw their biggest inflow in 8 weeks, an upside breakout in the dollar to 7-day highs and poor action on the charts in gold give the edge to the bear camp to start today. In fact, we are unclear on the measurement of the gold fund inflow measurement from BOA as overall gold ETFs have generally seen outflows and therefore Bank of America might have measured a narrower set of funds in their analysis.


Surprisingly, the palladium market held up impressively yesterday in the face of a very significant washout in platinum prices. Traders typically see China health/economic/political problems as a significant demand destruction threat for palladium used in the manufacture of gas burning vehicles, and therefore the growing threat against Chinese growth from Delta variant infection restrictions should have knocked palladium lower this week, instead of pounding platinum lower.


In our opinion, for the copper market to forge a positive close in the face of news that China has 144 areas classified as medium to high risk to variant infections, was impressive as that news could have sent copper prices plummeting towards $4.25. In fact, China reportedly has 20 cities that meet the medium to high-risk virus watchlist, and therefore it would not seem the outbreak is anywhere near containment.

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