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Peace Talks Combine w/Outside Market Pressure


With gold and silver starting the week under pressure from looming Ukraine/Russian peace talks and periodic strength in the dollar the path of least resistance today remains down. In a minimally supportive development, gold ETF holdings yesterday increased for the 13th straight session bringing this year’s net purchases to 7.9 million ounces.


Yesterday palladium saw fresh selling on Monday and traded to its lowest level since late January. Reports that some Russian palladium supplies were making it to market initiated the selloff on Friday and leaves the market under a liquidation bias. In fact, news of negotiations set for today between Ukraine and Russia in Turkey gives the market another reason to believe that Russian palladium supply could flow again. Even if the cease-fire talks go nowhere, traders are concerned that the Covid shutdowns in China will not bode well for computer chips and steel production necessary for auto manufacturing, which would slow demand for auto catalysts inputs like palladium.


While the reversal up yesterday in May copper could pull in some fresh copper buyers, ongoing concerning developments from the virus situation in China is a major fundamental hurdle for the bull camp. Furthermore, outside markets like nickel are under noted pressure in Shanghai today in a spillover negative for copper prices. In fact, the important seaport Shanghai is reportedly under a phased lockdown to contain the latest Covid infection surge.

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