Flows Are Beginning To Pick Up For The Metals, May Still Be A Head Fake Members of South Africa’s Association of Mineworkers and Construction Union (AMCU) voted overwhelmingly to strike this coming Thursday at the world’s top platinum producer, Anglo American Platinum, as well as Lonmin and Impala, which will affect over half of global platinum supplies. The strike action will see effects on palladium and rhodium supplies as well, while the AMCU has indicated to their members involved with gold production that they will also be given a strike mandate. The story has potentially profound issues in a market where the PGMs are expected to be in supply deficits, pre-strike, but caution is urged as historically these actions have been short lived. Meanwhile, gold and silver have remained muted. The metals continue to track the performance of the equity markets, which despite posting a green print on Friday, the breadth was limited to a few large cap stocks. Overall, the equity market is struggling to validate value and capital flows have again “ebbed” into the metals. Capital allocations into the ETFs have increased and by mid-week, data on Chinese imports will be analyzed to determine the voraciousness of Chinese demand. With the equity markets closed for the Martin Luther King Jr. holiday, volumes should be lighter than normal. The charts are showing constructive signs and $1,255 continues to be a target breach for the technicians. By Peter Hug Global Trading Director Kitco Metals Inc.
Posted on: Mon, 20 Jan 2014 14:13:13 +0000
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