The bias is down but a major wash in gold could produce a low
While a risk-off theme permeates the markets this morning, the Dollar Index is tracking slightly higher and adding to the negative macro view toward commodities. Fear of hawkish US Federal Reserve meeting minutes this afternoon combined with a 50-basis point rate hike from the Royal Bank of New Zealand overnight provides gold and silver with multiple bearish themes.
MARKET IDEAS: We are suspicious of yesterday’s strength in silver, platinum, and palladium, as concerns about economic slowing US rate hikes, and expanding negative sentiment flowing from a hard break in global equities should have pressured the precious metals. The gold market remains intensely focused on action in the dollar, and we suspect more weakness will be seen in gold today into the US release of the FOMC meeting notes.
MARKET IDEAS: While we see the long-term path of least resistance pointing up in copper, we are having difficulty rationalizing the recent rally from a fundamental perspective. Certainly, optimism toward a recovery in the Chinese economy remains high, even if estimates have pushed back recovery timing. Nonetheless, the $4.20 level has become a key pivot point, and that level could become support after a setback today.Follow @KitcoNewsNOW [email protected] www.hightowerreport.
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