Written Commentary
GOLD & SILVER
The gold market appears to be on a short covering rally from an oversold condition, as traders are on both sides of the fence regarding how far the Fed will have to tighten. The dollar has set back after another move to new highs yesterday and another 20-year high, and this is supporting gold. While the trade seems to be expecting a 75 basis-point hike this month, some are of the opinion that hikes will not continue at that pace into the new year. When the Fed is aggressive, it is hard to be bullish gold, but the threat of recession and/or persistent inflation makes it an attractive safe haven.
PLATINUM
Platinum has been leading the precious metals markets higher since the middle of last week. Perhaps reports this week that platinum supplies are still tight have given the market a boost. Another key factor has been the extremely oversold condition. On the other hand, an aggressive Fed could keep the dollar firm and limit the upside for all the metals.
COPPER
Copper prices continue to see coiling action following the holiday weekend, but they appear to have found their footing after a 40-cent slide from their late August high. December copper held an inside-day range yesterday before posting a moderate loss, but it broke out higher overnight. Workers at Chile’s Escondida mine are threatening to strike, and that supported copper, as that is the world’s largest copper mine. LME copper stocks continue to slide towards their lowest levels since April, with its 16th draw in 18 sessions.
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