Written Commentary
GOLD / SILVER
Despite a slightly higher dollar, gold prices forged a fresh seven day high and appear to have absorbed last week’s threat of rising interest rates. However, treasury yields are within striking distance of multiyear highs and given the much stronger-than-expected US nonfarm payroll report yields could breakout to the upside at any time. While the gold market last week carved out a gradual upward slope on its charts, the action was undersized considering the amount and importance of fundamental news flow. Unlike the gold market, the silver market last week did not rally and in fact at times silver was $0.50 lower on the week.
PALLADIUM / PLATINUM
The palladium market finished last week with negative charts and a fresh sell signal in short-term indicators. Therefore, it is not surprising to see the market forged a lower low and an eight day low early today. While the platinum contract generally slid last week, or in some views remained caught in a $1,000 to $1,050 coiling pattern the market has forged a fresh lower low along with palladium early today giving the bear camp control. While platinum is unlikely to draft as much lift from the Russian situation, it should see spillover support from palladium and crude oil price gains.
COPPER
All things considered, the copper market performed impressively last week in the face of an extended Chinese holiday. Unfortunately for the bull camp the copper market is seeing pressure from a disappointing Chinese services PMI reading for January which came in at 51.4 versus the prior reading of 53.1! While not a significant development, LME copper warehouse stocks have reestablished a pattern of declines and the trade has generally viewed demand to be outstripping supply.
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