Written Commentary
GOLD & SILVER
As we have been indicating for several weeks, a strong bull market has the capacity to shift its focus from one bullish theme to another when necessary. In other words, the gold and silver bulls have shifted their focus away from ideas of uncontrollable inflation and are now embracing prospects of sustained weakness in the US dollar. It should be noted that the dollar this morning forged a fresh lower low and appears headed to the early February lows However, it is also possible that the gold and silver trade sees a dramatic reduction in rate hike fears as a signal to investors to be long precious metal markets.
PALLADIUM & PLATINUM
With the major range up extension in platinum yesterday, it is very clear the market intends to join gold and silver as they benefit in the wake of a likely moderation of hawkish central bank actions ahead. However, we see platinum heavily dependent on favorable economic sentiment and we see platinum likely to establish a tight positive correlation with global equity markets. Even though the palladium market joined in the wave of gains throughout the precious metal markets yesterday, we are highly skeptical of the market’s capacity to extend and sustain gains.
COPPER
With a higher high and the highest trade since the middle of February the bull camp starts the last trading session of the week in control. While the copper market could have faltered yesterday in the wake of news of softer Chinese copper imports, the trade instead embraced record Chinese first quarter iron ore imports and a 22% jump in Chinese oil imports as the true measures of the status of the Chinese economy. Another sign of improving demand for copper came from a Bloomberg story overnight indicating that operating rates at copper rod production facilities rose by 12.5% over the prior month.
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