Written Commentary
GOLD & SILVER
While initial prices are softer today both gold and silver maintain bullish charts but will be heavily impacted by initial claims which are expected to show an increase in those claiming unemployment benefits. In other words, the bull camp needs soft economic data to further the rate pause mantra which was given added credence overnight from comments from the Atlanta Federal Reserve president Bostic who indicated that US interest rates are “high enough”. However, the PCE data is typically a significant input into Fed decisions and that combined with the last significant cycle of monthly jobs news ahead of the September 14th Fed meeting should mean volatility and the potential for a trend signal for early September.
PLATINUM & PALLADIUM
The upward grind in platinum prices has paused temporarily this morning with positive spillover from gold temporarily lost and the markets poised to react to today’s US jobs data. The latest Chinese stimulus aids first-time homebuyers which should help support commodity prices in general. In the end, the effectiveness of any single program offered by the Chinese government could now be a catalyst for a blowoff top in platinum.
COPPER
Unfortunately for the bull camp overnight Chinese PMI data was minimally supportive of copper if not neutral to copper prices. However, Chinese “manufacturing” PMI was minimally better than expected and that should be the primary data focus of the copper trade. Granted, disappointment in the non-manufacturing PMI readings from China keeps the outlook for China suspect. With a large 3,675-ton inflow to LME copper warehouse stocks that supply source is beginning to present a material negative to world copper prices. While disappointing Chinese data is negative to copper, disappointing US scheduled data should be supportive of copper later this morning. However, the most logical projection for copper price action today is for a continuation of the recent sideways chop as the headlines have been devoid of supportive supply threats from South America and the outlook for China continues to be concerning.
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