Written Commentary
GOLD / SILVER
With choppy action early today and a higher US dollar the onus is on the bull camp to prove they can hold prices up. While the market has not paid significant attention to physical supply news lately South African gold output in January increased by 7% versus year ago levels and that adds a measure of fundamental pressure to gold prices. In another bearish development gold ETF holdings broke a chain of inflows yesterday with an outflow of 4,376 ounces, but holdings remain 5% higher on the year. Silver on the other hand saw an inflow to ETF holdings of 2.1 million ounces and holdings are now 2.1% higher on the year. Countervailing the bearish South African production news is a strike at a South African Sibanye gold mining operation.
PALLADIUM / PLATINUM
In looking at the charts, the palladium market has produced 3 straight days of massive ranges with each close near the bottom of the wide ranges. Even though Russia will find it difficult to work its way around sanctions, seeing trade with China continue could offer an export avenue for Russian palladium. The platinum market made a terrible trade on the charts yesterday with a new high for the move and 3-day low close.
COPPER
Obviously, the charts in the copper market were severely damaged with yesterday’s downside action and they were only partially shored up this morning by holding above yesterday’s spike low. As indicated earlier in the week, we see an ultimate downside target in May copper at $4.47 as the threat of lost supply moderates and surging inflation prompts rate hike talk which in turn could slow the global economy.
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