Precious metals remain in focus, with wild gyrations from highs to low in all the precious/industrial metals.
- Eyes are on precious metals today as we already see wild gyrations in this asset class, potentially signifying the end of the recent extremely strong bullish trend:
- Silver briefly soared to an incredible new record high of $85 per ounce as soon as the market opened, before plummeting and bouncing then falling again to trade as low as $75 per ounce. If it ends today at this low, a lot of institutions will be exiting from long positions.
- Platinum is trading more than 6% below the week's opening price, if it doesn't bounce back this will also lead to a lot of liquidated longs.
- Palladium is down by more than 10%, reversing last Friday's wild rise. We are also likely to see serious liquidations of longs here.
- Gold is also down but is behaving much more normally and manageably. It looks like the bullish trend here will probably survive.
- These huge drops show that it is wise to respect huge increases in volatility when they happen. What soars higher, is also likely to crash lower.
- Stock markets were rising weakly at the end of last week, with the S&P 500 Index making a new all-time high on the surprisingly strong US preliminary GDP data which came in at an annualized rate of 4.3% when only 3.3% was expected. However, the bullish price action is very weak, so a further meaningful gain is looking doubtful.
- In the Forex market, since today's Tokyo open, the strongest major currency has been the Australian Dollar, and the weakest has been the New Zealand Dollar, although the market is relatively quiet as we approach the New Year holiday. The USD/MXN currency pair just made a new 18-month low, but is showing bullish short-term price action.
- It is likely to be a low liquidity week, with public holidays in most countries on Thursday and in some countries on Wednesday.