Written Commentary
GOLD / SILVER
We see the early action today as a mere bounce in oversold markets, as the markets continue to face fear of further strength in the dollar at-the-same time that the hawkish Fed influence hangs over all the markets. Unfortunately for the bull camp, gold and silver ETFs saw outflows yesterday and the press continues to tout the potential for gold to post the biggest weekly loss in more than a year. While there were a number of fundamental and technical reasons for precious metals prices to come under a historic washout, noted strength in the dollar and the hawkish Fed pivot rank near the top of the Bear’s list. Unfortunately for the bull camp, the bearish fundamentals facing the markets are unlikely to reverse soon.
PLATINUM / PALLADIUM
The selloff in the PGM markets yesterday was so violent that margins for platinum trading were increased and open interest collapsed in a sign that risk has become too much for many traders. A massive range down wash in platinum was to be expected yesterday with the market already in a uniform downtrend from the early May high.
COPPER
While the copper market has shown the ability to bounce overnight, Shanghai copper stocks fell on the week and many other commodities are showing initial positive traction a recovery in copper prices is likely to be temporary and mostly short covering. However, the massive slide in copper this week (-$0.43 cents) puts the copper market in a significant oversold short-term technical condition.
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