Written Commentary
GOLD & SILVER
While the dollar continues to consolidate, it remains near contract highs and a headwind for gold and silver prices. However, with an upside breakout in US treasury yields again this morning rates are creeping higher and should add to the bearish tilt in precious metal prices. The bearish tilt in gold and silver is further manifest in the markets inability to benefit from flight to quality from another emerging Chinese lockdown threat at two major Chinese cities. Yet another negative for the markets is an extension of the capital exodus from gold and silver ETF holdings.
PALLADIUM & PLATINUM
While the palladium market has respected this week’s low in the early going today, physical commodity market influences are bearish and lower pricing is anticipated. Like the gold and silver markets, the PGM markets remain under a similar bearish cloud of rising Dollar and rate fear. In fact, traders were not upbeat on a quick expansion in global auto production ideas before evidence of the current slowdown surfaced last5 month and now physical demand is likely to slump in a similar fashion as investment demand. With a fresh downside extension yesterday in October platinum putting the market in striking distance of the July low, bargain hunting buyers are likely to remain on the sidelines until the market shows the capacity to consolidate.
COPPER
With a Chinese mega-city (Chengdu 21.2 million) under lockdown this morning and fear of other cities being lockdown significantly ratchets up Chinese copper demand fear. While not as important to copper prices, US jobs data over the coming 24 hours will be seen as another indication of potential copper demand ahead. At least in the near term, a series of large daily outflows from LME copper warehouse stocks are ignored/discounted by the market in favor of deteriorating demand chatter.
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