Written Commentary
GOLD & SILVER
Apparently, another sharp downside extension in the dollar index has failed to support gold and silver prices this morning. Adding into the negative environment for gold and silver are accelerating outflows from ETF holdings. Yesterday gold ETF holdings saw a very large (16 month high) outflow of 373,489 ounces bringing down the year-to-date expansion of holdings to 4.3%. In a very minimally supportive development Swiss gold imports from Russia in June were less than 1/10th the amount in May which could signal compliance with the Russian gold embargo.
PALLADIUM & PLATINUM
While palladium prices have consistently narrowed their daily trading ranges recently, what little demand news available favors the bear camp. In addition to a decline in palladium ETF holdings of 1,130 ounces yesterday (holdings are now down 13% year-to-date) the market overnight was presented with news that Swiss palladium exports declined by 53% in June. Similarly, the net spec and fund short in platinum likely resulted in a larger than justified short covering rally in platinum yesterday.
COPPER
Overnight the copper trade has balanced its bullish views from the Chinese real estate developer stimulus with a reality check concerning the likely delay from the stimulus in lifting copper demand. Furthermore, more reports of lockdowns in China leaves the Chinese copper demand outlook negative in the near term. In fact, cash copper prices in and around the most important Chinese smelting/refining city softened over the previous 7-days. An additive negative for the trade today is a large 5,925-ton increase in LME copper warehouse and fear of tightening from several central banks in the coming days.
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