Written Commentary
GOLD / SILVER
The bull camp encountered a nearly “perfect storm” of bearish fundamental developments yesterday, but the market seems to have digested and rejected that wave of bearish news. The sharp jump in US treasury yields (reportedly sparked by an upward revision in the number of US rate hikes expected this year) seemed to be the primary driving force behind the selling. However, gold is trading higher this morning in the face of slightly higher US yields again this morning. Furthermore, gold and silver are tracking higher this morning in the face of further gains in the dollar.
PALLADIUM / PLATINUM
With the large washout down yesterday, the palladium market took out almost half of the December recovery. In a sign of slack investor interest, palladium ETFs last week saw outflows of nearly 9,000 ounces. Fortunately for the bull camp palladium ETF holdings at the end of 2021 showed a year-to-date gain of 7.2%. It goes without saying that part of the washout in palladium prices yesterday was the result of rate hike fears and strong dollar action. In retrospect, the platinum market forged a massive trading range of $57 yesterday and managed to recover back above psychological pivot point pricing of $950. Unfortunately for the bull camp, platinum ETF holdings last week declined by 20,087 ounces and finished the year with a decline of 6.6%.
COPPER
Like other metal markets the copper market forged a very wide trading range Monday of $0.145 and then finished lower. The inability to regain $4.50 yesterday suggests consolidation highs continue to offer thick resistance. However, bullish longer-term price forecasts continue to flow from the London copper trade, with the latest projection putting LME copper at $10,715 per ton in the first quarter. While there are ongoing fears of supply disruptions in Chile, the supply-side of the equation has been quiet recently.
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