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Temporary Bottoming In Gold & Silver


With the April gold contract rejecting last Friday’s low and temporarily regaining a key moving average this morning, the bear camp is less confident in its positioning. However, the bounce in the gold and silver trade might be largely attributable to the reversal and sharp slide in the dollar from last week’s high of 111 ticks.


With a new high for the move and reversal yesterday followed by a lower spike trade this morning the palladium market could be signaling a top or could simply be signaling an increase in volatility. The PGM markets are probably undermined because of the ebb and flow of the Russian/Ukraine situation with yesterday’s storyline suggesting the Russians have responded in a written letter to the US/UN and have indicated they are not planning an invasion. Platinum traded higher, but this was after a three-day selloff, so it is possible that the action reflected some spread unwinding.


In retrospect, we would call the less hawkish US Federal Reserve revelations yesterday as a relief to the copper trade, instead of a full shift back into a bullish environment. However, LME copper stocks have continued to decline and overnight global equity markets were higher, and the charts have shifted slightly positive with a $0.07 rally off yesterday’s low. While global equity market action is giving off some positive vibes again today, the brunt of international manufacturing PMI data released overnight was softer than expected thereby keeping optimistic copper demand views in check.


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