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Metals Lower


As we suggested earlier in the week the gold market appears to be poised to see expanded two-sided volatility as the markets focus has seen a number of different forces began to drive prices. Apparently significant volatility in US equities yesterday afternoon and moderate losses in global equities overnight have not sparked safe haven buying in the early Tuesday US trade. Similarly silver ETF’s added 2.89 million ounces to their holdings bringing the year to date purchases up to 214.2 million ounces. A continuation of significant daily Silver ETF inflows could easily feed silver prices sharply higher.


Not surprisingly platinum and palladium prices have fallen back along with the gold and silver prices with the markets not benefiting from news that South African PGM output in May declined by 27.3%. In fact the palladium market this morning sits nearly $90 below yesterday’s high but in the bulls court is the fact that yesterday’s large range up move saw some of the highest trading volume since early March.


We are a little surprised that copper is trading lower in the early going today as the market was presented with news of a record Chinese unwrought copper import tally in June. In fact the Chinese import tally was a 50% increase over May and that news was joined by a large decline in LME copper warehouse stocks. Even more surprising is the fact that copper prices are trading lower in the face of news that a major copper mining union in Chile voted to strike.

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