Written Commentary
GOLD & SILVER
Even though April gold posted a solid gain in Wednesday’s trade, further confirmation of residual/sticky US inflation today could unleash an additional and perhaps more aggressive long liquidation washout. Fortunately for the bull camp, the US dollar has not rallied on stubborn signs of sticky US inflation and declining US rate cut hopes, but that could change if Tuesday’s inflation concern is reconfirmed by today’s inflation news. It should also be noted that Bitcoin posted new all-time highs again and most gold mining shares showed significant gains yesterday with Newmont and Barrick up 1.7%, Harmony gold up 3.6% and Sibanye Stillwater up 6.7%. Therefore, despite a lack of interest in gold ETF instruments, speculative interest continues to be strong for many gold and silver products like mining shares, bars, and coins and therefore without an outside of the range of estimates upside result for today’s US PPI, the bull camp should extend its control.
COPPER
While we were surprised by the upside breakout in copper prices yesterday, we were even more surprised with the magnitude of the upside extension. However, the trade saw aggressive speculative buying surface after a group of Chinese smelters agreed to joint production cuts. The unilateral decision to cut Chinese smelting capacity was the result of a combination of extremely poor treatment charges for smelting and tightness of raw material feedstocks.
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