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Initial Gains to Give Way to Volatility


With signs of a sagging US dollar early on today February gold has clawed out a 3-day high and would regain a key pivot point with a trade this morning back above $1811.60. Surprisingly the market has managed to rally despite promises from the US Federal Reserve Chairman that the Fed will “ensure inflation does not take root in the economy”. Therefore, a slightly hotter than expected reading from CPI tomorrow could result in lower gold action while an as expected or lower reading could be beneficial to gold and silver.


Despite a potentially bearish UBS prediction that the palladium market will be in balance next year, palladium prices managed a 6-day high yesterday and ventured near a critical downtrend channel resistance line of $1,967.10. Unlike the palladium market, the platinum market fell hard yesterday despite UBS predictions yesterday that the world platinum market will be undersupplied by about 100,000 ounces or 1.3% of annual demand this year.


The charts present a slightly bearish track with lower highs and lower lows generally prevailing since the late December highs. While many physical commodity markets are not completely unnerved with the record 1 million plus record US daily infection count, we suspect many would-be copper buyers are standing back because of the surges, especially given the proximity to the US Federal Reserve Chairman testimony today.

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