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Metal Bulls Start with Extremely Narrow Edge


Despite negative outside market forces like higher rates, a stronger dollar and lower economic uncertainty following the US jobs report, the gold and silver markets are tracking higher early on. From a technical perspective, the gold market two weeks ago had the largest net spec and fund long since March 2020, but that was brought down to a more balanced position in the latest report.


With the June palladium contract forging a 4-day high at the end of last week, and trading near last week’s highs in the early going today, the bull camp maintains a slight edge. On Friday palladium ETFs reduced their holdings by a mere 586 ounces, and holdings last week declined by 4658 ounces, but those holdings are still 1.2% higher on the year. The charts in the platinum market are patently bearish with the market attempting to build a layer of consolidation support around $982.10.


With an extremely poor finish to the trade last week, the bias in copper prices has shifted down. In retrospect, a series of disappointing Chinese economic data points and a pattern of inflows to LME copper warehouse stocks last week suggest both supply and demand favor the bear camp. Some long-term studies point to a narrowing of the anticipated world deficit in copper because of China even though some Russian supply will be lost.

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