ETF Holdings Decline

GOLD / SILVER

While it seems counterintuitive, the gold market yesterday came under massive liquidation pressure following statements from a-number-of industry icons who predicted raging inflation unless the Fed begins to change its tune. In fact, the bull camp in gold should be very discouraged given the massive washout in gold yesterday took place in the wake of statements from a legendary fund manager (Paul Tudor Jones) suggesting he would be “all in” on inflation investments in-the-event that the Fed maintains its supportive stance through the coming meeting. Yesterday gold and silver ETF holdings declined with the gold decline relatively larger than the silver decline.

PALLADIUM / PLATINUM

While a single day is not justification to expect a trend yesterday palladium ETF’s saw a noted inflow to holdings perhaps because it benefited from inflationary expectations in addition to hope for expanded auto catalyst demand following significant global reopening Press coverage. The platinum market managed to diverge with the rest of the precious metals complex yesterday and close higher, but we suspect that action was the result of reversal of long palladium/short platinum spread trades and not because of fresh speculative long interest in platinum.

COPPER

With a major downside failure and washout in copper the charts have shifted definitively in favor of the bear camp, while others see the failure in copper this morning as a sign that the pendulum is shifting on interest rates. While the Federal Reserve will not issue a statement until tomorrow afternoon, it would appear as if a burdensome net spec and fund long in copper is already moving to the sidelines.