Written Commentary
GOLD & SILVER
With the gold market only temporarily extending the July and August rallies in the wake of yesterday’s softer than expected US CPI reading, (all CPI component readings registered softer inflation) and the October contract settling back below $1,800, the bounce has stalled. While the dollar is slightly supportive with the index sitting just above yesterday’s low this morning, but hawkish dialogue from the Fed’s Kashkari overnight has put gold and silver on a back foot to start today. Apparently, the Minneapolis Federal Reserve bank president reiterated the likelihood of a long inflation battle ahead and indicated the US economy could be in recession soon.
PALLADIUM & PLATINUM
In retrospect, the PGM markets skated through the financial market volatility yesterday and seem to have come through the event with a positive track. Adding into the bullish tilt is news overnight that South African June PGM production declined by 9.8% on a year over year basis. Like gold and silver, palladium and platinum ETF holdings have continued to decline persistently in a sign that small investor interest in the PGM’s remains very poor.
COPPER
With two new and major Chinese lockdowns announced this week, the bull camp in copper is very fortunate to see distinct improvement in the overall global economic environment following softer US inflation data yesterday. Certainly, China is a dominating force in the copper market, but the US economy is also a key driver of the global economy, and the US economy could now become a cushion for copper against recession in Europe and ongoing Covid issues in China.
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