Written Commentary
GOLD & SILVER
Both gold and silver face a 2nd day of US Federal Reserve Chairman testimony to the US Congress where discussions of more aggressive and longer in duration tightening policy are expected to flow again. Unfortunately for the bull camp the dollar index has forged a higher high extension this morning following yesterday’s sharp range up move thereby pulling currency-related pressure on gold and silver into another session. Not surprisingly, expectations for the March 21st/22nd FOMC meeting have boosted the odds of a 50-basis point rate hike and that should leave gold and silver in a general downward motion.
PLATINUM & PALLADIUM
The lack of a noted recovery from yesterday’s major range down washout in the face of very bullish overnight fundamental news highlights a prevailing bearish view toward platinum prices. Apparently, the World Platinum Investment Council raised its 2023 platinum supply and demand deficit to 556,000 ounces which is a significant jump from the deficit forecast of 303,000 ounces from November. Fortunately for the bull camp in palladium, the market recovery off the late February spike low resulted in minimal short covering gains as the reversal in financial market conditions is likely to push palladium into a fresh downside breakout today.
COPPER
While the copper market might have overreacted to news of softer Chinese copper and copper product imports in the first 2 months of 2023 yesterday, China remains “the primary and dominating” driving force of the copper market. Certainly, it is possible that the early 2023 Chinese copper import data overstated the drop in demand as the rollback of activity restrictions were not fully completed early in the two-month period, there was a week-long holiday in the import period and internal exchange/industrial inventories of copper rose sharply (for 5 weeks straight) thereby likely discouraging imports.
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