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Markets under pressure this morning after gloom and doom Chinese data overnight. Also hitting the wires is news that Greek lawmakers have agreed to a pension and tax reform plan that will require more stimulus from the Eurozone members.
This news has disappointed the gold market after witnessing open interest up 21,848 contracts on the CME Friday, with hopes that gold would test the $1,300 dollar level. Chinese import data disappoints the base metal markets which in turn also puts platinum and palladium in a downward spiral. All eyes now on the Chinese economy slowing and that’s not good for the precious metals or base metal market.
Some Wall Street traders indicated that the news this morning has all the nervous longs in all four metals selling out of their positions, taking whatever profits that are left on the table and flattening out their positions. I expect tomorrow the numbers will reflect a large redemption in the ETF and CME open interest figures.
Technical levels of support in Platinum and Palladium have been violated so we just have to wait and see how the market reacts after the dust clears. For gold, looking at the charts the next level of support will be the $1,252 level in the June contract and $ 16.68 in the July contract. I‘ll have to wait till tomorrow to see how much damage was done to our so called “bull market.”
Author Name: Walter Pehowich
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