Written Commentary
GOLD / SILVER
While the downside breakout in the dollar to start today is insignificant, a lower low has been forged and the currency influence on gold and silver should help support prices against an initial bearish tilt. In fact, China saw its consumer price index on a month over month basis contract by 0.3%, with producer prices coming in below expectations and below the prior month’s result.
PALLADIUM / PLATINUM
We suspect that the Palladium market found lift yesterday from outside market action in gold, silver, crude oil, and the currency markets. It is also possible that a less hawkish than feared Federal Reserve Chairman testimony prompted another wave of spec and fund shorts to exit and move to the sidelines. In addition to the platinum market becoming oversold from a 4-day high to low slide of $85, the platinum market was also relieved by less than hawkish Fed commentary yesterday.
Set of copper pipes of different diameter lying in one heap
COPPER
While we may be overstating the correlation between soft Chinese and German prices on global central bank policy, seeing inflation come in softer than expected from several sources is certainly a change of pace and that might be contributing to the aggressive rally in copper prices to start today. However, a more likely catalyst for the rally is comments from the Barrick Gold CEO indicating that supply challenges will be seen in copper in the “near term.” Another and very credible source of strength overnight came from fears of a labor strike at a Canadian mine located in British Columbia.
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