Written Commentary
COPPER
With a fresh lower low for the move overnight, noted weakness in Chinese equity markets and a lingering bearish cloud from an ICSG January world refined copper surplus that leaves the bear camp with control of copper this morning. However, LME copper warehouse stocks dropped significantly overnight and open interest in futures trading has continued to rise on the liquidation, potentially signaling bargain hunting buying. While the stronger than expected US durable goods reading for February released provided support yesterday, the May copper contract ultimately forged a fresh lower low for the move and the lowest trading price since March 13th.
GOLD & SILVER
Even though June gold has managed to build consolidation low support just under $2200, the dollar charts show residual bullishness which in turn offers overhead resistance for gold and silver. Today’s US economic report slate presents minimal news from weekly mortgage applications and a seven year note auction at midsession. With June gold flaring sharply higher and giving up those gains quickly yesterday, the market has given off another blowoff top signal on the charts. However, Indian buyers are beginning to show sensitivity to near record gold prices and the Indian government has moved to restrict investment in gold loan schemes which is a classic sign of an overdone market. Even Chinese gold demand news has shifted negative with Chinese gold imports through Hong Kong dropping 48% in last month and reaching the lowest level since November. Going forward, the gold bulls will need to see a resurgence in Bitcoin prices, a sustained slide in the dollar or a significant drop in US treasury yields for the bull camp to regain definitive control.
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