PLATINUM / PALLADIUM
In retrospect, the platinum market fell precipitously last week despite favorable US total vehicle and total light vehicle sales readings and showed very little bounce in the face of US jobs data which should temper global economic slowing fears. However, the PGM markets do not show consistent sensitivity to outside market signals and are likely to continue to erode. On the other hand, the palladium market with the declines at the end of last week likely has a record net spec and fund short while the platinum with the declines late last week might only be approaching neutral positioning.
GOLD / SILVER
Not surprisingly, gold and silver are benefiting from the uncertainty created by the attack of Israel by Hamas. Fear of hostilities throughout the Middle East usually results in a knee-jerk reaction rally in gold especially with respect to events involving Iran. According to Bloomberg gold rallied and failed in January 2020 when Iran launched retaliatory missile strikes on US bases in Iraq and a rally also failed in 2019 when oil flow through the Straits of Hormuz was threatened by. With the dollar at the end of last week reversing down and posting a five-day low, at least one outside market pressure on gold and silver has moderated slightly. However, treasury market action continues to be limiting following another 17-year upside breakout in US treasury yields last Friday.
COPPER
Apparently there were reports of strong Chinese demand early today as Chinese entities returned from holiday and possibly caught up on operations. While the end of the extended Chinese holiday might result in a smattering of upbeat economic Chinese press reports, the woes of the property sector remain and would be buyers are unlikely to step in in force without another stimulus package. In the end, the international Copper study group sees the tight supply scenario loosening and expects more production in the coming 12 months.
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