Written Commentary
GOLD & SILVER
A long list of bearish internal fundamentals, combined with a long list of bearish external fundamentals, leaves the path of least resistance pointing down in gold and silver. While the June gold contract might see support at $1,850, expectations for a very minimal gain of 0.2% in this week’s consumer price index reading (Wednesday) could mean hope for inflation is reduced dramatically. Another negative for gold and silver prices came from the Atlanta Federal Reserve President Bostic who said he expected the Fed to hike rates 50 basis points in 2 or 3 meetings before the end of the year.
PALLADIUM & PLATINUM
The palladium market was one of the very few physical commodity markets posting gains to start the trading week. However, palladium supply fears were rekindled yesterday after the UK announced it would hike import duties on Russian palladium and platinum and that gave the bull camp hope. Apparently, duties on UK PGM imports were raised by 35%! On one hand, the platinum market spikes lower clearly erased the late April and early March uptrend setting a negative technical force in place. With Russia a key supplier to the UK and the UK the largest exporter of platinum to the world, the duties on Russian platinum should discourage some purchases from Russia.
COPPER
While copper prices have rebounded overnight, we suspect that is a technical short covering/balancing move from the 3-day high to low slide of $0.32. Certainly, disappointing Chinese import, and export data Sunday night started copper off on a negative footing yesterday. However, economic slowing fears from rising interest rate fears, and hard declines in US equities adds to the fear of slumping Chinese copper demand.
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