Written Commentary
GOLD / SILVER
While gold and silver finished Friday with moderate losses for the day and week, they are starting with silver rallying to a one week high and gold under pressure. Platinum and palladium have rebounded off their 2024 lows. However, further gains are being held in check by ongoing Asian and European auto catalyst demand concerns. Although they started a 1-week Lunar New Year holiday on Friday, China’s economic concerns are not going away anytime soon, and they continue to weigh on the near-term demand outlook for both precious metals. The S&P and Nasdaq stock indices are holding near their record highs set Friday and their ongoing strength since mid-January are pressuring gold and silver prices. Tuesday’s US CPI release will have a critical impact on gold and silver prices. The year-over-year rate for CPI needs to resume its longer-term downtrend and core CPI needs to maintain its downtrend for Fed rate cut hopes to be strengthened. If that happens, gold and silver have a strong chance of regaining upside momentum.
COPPER
While a rebound in global risk sentiment has put some brakes on its February selloff, copper prices are showing few signs of regaining strong upside momentum. While it was released a day early due to the Lunar New Year holiday week starting on Friday, a seventh weekly increase in a row for Shanghai exchange copper stocks continues to be a source of pressure on copper prices. Chinese demand concerns from a weaking economy continues to weigh on copper prices. LME copper stocks were lower today, making it their thirteenth daily decline over the past 14 sessions. LME copper stocks have fallen to their lowest level since mid-September, and that bodes well for copper’s global demand prospect.
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