Written Commentary
GOLD / SILVER
We see the near-term trend in gold and silver as mostly sideways/choppy with a modest downward bent. Fortunately for the bull camp the dollar has not managed more definitive gains, but the index has forged a 3rd straight day of higher highs this morning. While the gold and silver trade have not displayed significant correlation with equities, we see prices tracking equities tightly in the coming days because of the FOMC statement and press conference tomorrow.
PALLADIUM / PLATINUM
With a range down failure in March palladium yesterday, it seems as if the palladium trade is fleeing to the sidelines well ahead of the Fed result. The market fell aggressively despite supportive comments from Commerzbank suggesting that palladium prices would recover next year but only modestly. While the January platinum contract held up better than palladium to start the trading week, the two markets appear to be vulnerable to fears of classic slowing physical demand in the face of another wave of infections and activity restrictions.
COPPER
With the UK Prime Minister’s stark warnings regarding the omicron wave of infections, commodity markets starting the new week out on a negative track, fears of hawkish Fed statements tomorrow and negative internal supply news the bear camp in copper clearly has the edge. While it might be premature to suggest that the trend of declining LME copper warehouse stocks has come to an end, recent daily stock “builds” have given the bull camp pause.
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