Written Commentary
GOLD & SILVER
Seeing the gold market avoid a sharp setback off news of a $54 billion cash infusion by the Swiss central bank into Credit Suisse highlights a market with some residual bullish resolve. This morning action in the dollar is nondescript but the impact on gold and silver from overnight economic developments was bearish, with softer Chinese house prices and soft Italian consumer price index reading. However, fear of an ongoing banking crisis does not look to dissipate quickly or fully and will likely require days if not weeks without specific fresh rumors of trouble at other institutions. On the other hand, silver, palladium, and platinum continued to show divergence with gold again today as lower flight to quality interest pressures gold while improved global economic sentiment helps lift the rest of the precious metal markets.
PALLADIUM & PLATINUM
After the significant plunge off this week’s high of nearly $60 in platinum, the rejection of the $950 level yesterday afternoon might signal platinum has found value and or key support. Unfortunately for the bull camp in the PGM markets, both platinum and palladium ETF holdings fell sharply yesterday, indicating investors do not view PGM instruments as effective flight to quality instruments. Therefore, given the Swiss central bank injection into the troubled Credit Suisse bank, macroeconomic conditions have shifted slightly back in favor of the bull camp in platinum and palladium.
COPPER
While the May copper contract this morning has avoided a lower low for the move prices remain near yesterday’s spike down low and therefore the charts remain bearish. Certainly, seeing the Swiss Central Bank inject $54 billion into Credit Suisse helps support deteriorating global economic sentiment, but the copper bulls are likely to be discouraged by news overnight of a contraction of 1.2% in Chinese house price index readings for February. Yet another negative for copper this morning is this week’s unfolding pattern of inflows to LME copper warehouse stocks, with the exchange adding nearly 5,000 tons in just 2 sessions.
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