Written Commentary
GOLD / SILVER
With the dollar near an upside breakout early today, treasury yields on the rise and the potential for ongoing equity market volatility, the bear camp in gold starts the session with an edge. The silver market continues to perform like a classic physical commodity in the face of a big picture broad-based risk off environment largely fostered by huge gyrations in equity prices. While the gold market has periodically benefitted from the uncertainty flowing from the Ukraine, the silver market has seen more pressure than support.
PALLADIUM / PLATINUM
The palladium market remains the strongest physical commodity market in the new trading week with the trade continuing to factor in the potential for a disruption of Russian PGM supply flow to the world. Evidence of the threat against palladium supply flow resulted in a discounting of news of an increase in palladium production by Norilsk Nickel in the 4th quarter. The platinum market yesterday diverged with palladium in a sign that it lacks the same bullish fundamentals thought to be in place in palladium.
COPPER
What the copper market gained last week, it gave up Monday with demand fears rushing back to a front and center position. Obviously, news of another quarantine for a Chinese city is a major demand destruction threat, especially with US equity markets yesterday forging panic-style declines. Unfortunately for the bull camp, the dollar continues to show signs of strength, nickel prices have fallen sharply from a 10-year high, and the trade continues to show little concern for potential Covid-induced production losses at the world’s largest copper mine.
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