Written Commentary
GOLD & SILVER
Apparently, a slightly bearish tone has been adopted in the gold and silver trade to start the last trading session of the year, as the US dollar technically forged a 5-day low in the early going this morning. Perhaps the trade is embracing headline coverage this morning pointing out that gold is poised to post a 2nd straight annual decline. However, it should be noted that silver prices are likely to manage a positive trade for 2022. With US treasury bonds yesterday making a lower low and the lowest trade since November 16th, the fear of rising implied treasury futures yields is problematic for the bull camp in gold and silver.
PALLADIUM & PLATINUM
Not surprisingly, fundamental news flow pertaining to the PGM markets continues to be extremely thin and given the additional thinning of trade due to the holidays today, it is not surprising to see palladium post 3 days of nearly identical trading ranges. In the platinum market, a very impressive upside breakout and 12-day high indicates residual bullishness despite the potential threat of demand loss from the Chinese Covid explosion. Unfortunately for the bull camp, platinum ETF holdings started 2022 at 2.5 million ounces and posted the lowest holdings of the year at the end of the year of 2.3 million ounces.
COPPER
On one hand, the copper market has held up relatively well in the face of a growing demand threat from the world’s largest consumer. On the other hand, the threat against Chinese copper demand is escalating and could be compounded by the upcoming Chinese lunar new year holiday. Additional bearish news flowed from the supply front overnight with daily LME and weekly Shanghai copper warehouse stocks posting inflows. While the recent pattern of LME exchange stock flows shifted to daily inflows this week might be a function of thinned holiday activity, there have been more daily inflows to the London warehouse this week than in the past 6 weeks.
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