Written Commentary
GOLD & SILVER
While the dollar has not shown fresh direction following its aggressive recovery bounce yesterday, the upward bias from the charts and a measure of newfound respect for lingering inflation reduces the prospect of US easing in June. However, gold and silver should be cushioned by continued chatter about a European rate cut in June. In today’s action the markets could simply “mark time” as the other shoe to drop (Thursdays PPI) could easily rekindle another upward pulse in the dollar and downward pulse action in gold and silver. However, today’s US economic report slate is devoid of reports likely to produce reactions in precious metal markets unless US treasuries react more than usual to US mortgage applications.
COPPER
Given the upside breakout overnight to the highest price level since late December, the Chinese copper trade is apparently focused on talk from Chinese smelters of the lack of available copper concentrate supply which in turn has resulted in a coordinated effort to close facilities with operating losses until treatment charges recover and domestic raw materials become more available. A minimal positive overnight development came from another decline in daily LME copper warehouse stocks but that was partially offset by Chinese new loans for February posting below the prior month.
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