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Gold Lifted by Economic Data

GOLD / SILVER

We remain highly suspicious of yesterday’s outsized rallies in gold and silver prices. The Press pegged the source of the large rally in gold and silver yesterday as a simple end of quarter shift in the flow of funds. On the other hand, the gold market probably saw a lift from soft US (a 3rd week of higher claims) and Chinese (Negative PMI) economic data with economic uncertainty providing some renewed flight to quality buying.

PALLADIUM / PLATINUM

While the palladium market continues to build a consolidation pattern just under the $1,825 level, a lack of impressive short covering gains following an extreme oversold condition recently is disheartening for the bull camp. The platinum market has a clear pattern of lower highs and lower lows since the middle of this month, with open interest and trading volume falling off on the slide.

COPPER

While the copper market is likely to post a loss on the week, the market appears to have found footing above $4.05 and has forged the overnight bounce in the face of fresh Evergrande fears and a Bank holiday in China. Unfortunately for the bull camp, the copper market yesterday saw Citi declare it was “incrementally bearish on copper in the near term”, but that bearish influence was quickly tempered by news that Chilean August copper output declined by 4.6% over year ago levels.

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