GOLD & SILVER
Despite a $128 rally in July and August the gold market so far has not suffered a severely damaging reversal from this week’s high. On the other hand, the charts have shifted bearish, the dollar did not extend downward off the PPI report as it did after the CPI report and recession fears have not been altered markedly. However, seeing June South African gold production come in 28% below year ago levels should help underpin gold prices against the recently established corrective tilt. Even though treasury market action since the middle of June has been supportive of gold and silver, that support has turned into pressure with treasury yields overnight reaching up to the highest level since July 21st.
PALLADIUM & PLATINUM
The upside extension yesterday in palladium to the highest level since May 2nd indicates a continuing bull case. Some traders suggest that auto production is now expanding at a quicker pace with chip manufacturing regaining momentum and hopeful that the US chip sector assistance program will stimulate even faster chip output. In another supportive development for the PGM sector, Stillwater has cut its production guidance by 60,000 ounces for 2022 because of floods around their Montana facilities. The chart action in the platinum market yesterday was even more impressive than the action in palladium with the high yesterday producing a low to high rally of nearly $100!
Despite weakness in Chinese equity markets overnight, a large 20.3% increase in weekly Shanghai copper warehouse stocks and a minimal rise in LME copper warehouse stocks, September copper made a higher high for the move overnight and sits as if poised to climb above $3.75 in coming sessions. Countervailing the Shanghai warehouse stock inflow is proof that 200,000 tons of copper concentrate is indeed missing from a Chinese port storage facility.
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