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Metals Give Back Gains

GOLD / SILVER

The gold market was presented with bullish and bearish news overnight, but clearly embraced the bear side of the equation. From the bull side of the equation, Indian gold imports for August jumped by nearly 50% last month and reached the highest level since the first quarter reportedly from restocking, bargain-hunting buying and festival interest. Like the gold market, the silver market has also posted significant declines in what appears to be a classic “give back” of an overreaction to the likely delay in US tapering because of the slack jobs report last Friday.

PALLADIUM / PLATINUM

While December palladium has managed to hold above last week’s double low level of $2381 in the early going today, negative spillover pressure from gold, negative Asian equity market action and residual disappointment from last week’s soft US jobs report could result in a downside breakout and a 7-day low directly ahead. The platinum market is also suffering because of the short-term overbought condition from the rally last Friday, but the trade is also discouraged by another large daily outflow from platinum ETF holdings of 8,986 ounces on Friday which in turn has brought the year-to-date change to a decline of 1.2%.

COPPER

Obviously, the copper trade is very disappointed in Chinese August imports of copper, with August imports dropping by 41% from a year earlier. However, year-over-year comparisons are fraught with problems given strategic stockpile sales from China and a pattern of significant declines in weekly Shanghai copper warehouse stocks.

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