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Impressive Gains Despite Outside Mkt Headwinds


With weakness in oil, and fresh new highs in US treasury yields lingering from last week, the $16 early gain in gold and the $0.34 initial gain in silver appears out of place. While we expect outside pressure from weak oil prices to abate later this week, seeing the dollar following through down from a blow-off reaction Friday is likely the biggest bullish force in the early trade today.


In our opinion, the palladium market remains the purest signal of the ebb and flow of the war with a fresh additional restriction of Russian PGM outflows enacted Friday likely resulting in a near term pulse above $2,600 in the June contract. In fact, seeing the London Platinum and Palladium exchange move to suspend two state-owned Russian PGM refiners that certainly justifies Friday’s rally and today’s follow-through rally. While the July platinum market showed the ability to follow palladium on last week’s late in the week bounce, the two markets are unlikely to track tightly together. In fact, platinum net spec and fund long positioning leaves the market vulnerable to a measure of stop loss selling.


From a longer-term perspective, the copper market charts are bullish with the trade consistently respecting uptrend channel consolidation low support since December. However, copper prices might be slightly undermined by today’s early release of Chinese inflation and impacted throughout the rest of the week by subsequent global monthly inflation readings from Japan, Europe, and the US. The bull camp should draft minimal support from news that Chinese March copper cathode output increased slightly from February despite maintenance of smelting facilities in the country.

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