Written Commentary
GOLD / SILVER
Fortunately for the bull camp today gold and silver are not seeing pressure from surging US interest rates but the markets are limited because of a slight upward pulse in the dollar. Certainly, the gold market corrected aggressively from yesterday’s high and forged a lower low this morning, leaving the recent 10-day rally suspect into the last trading session of the week. Even though gold and silver are not benefiting as would be expected from surging US inflation evidence, overnight inflation related data from Germany, Switzerland, and New Zealand should provide some cushion.
PALLADIUM / PLATINUM
While the palladium market managed to rally following the US CPI report release yesterday, the market was unable to hold those gains into the close in a fashion that suggests inflation buying of palladium continues to be limited. However, the palladium market should be underpinned because of a forecast from Russian miner Norilsk Nickel which pegged the global palladium market to be in deficit of 300,000 ounces this year. Even though the platinum market failed to hold a sharp upward probe following the CPI report yesterday, seeing the market react to inflation is a change of pace.
COPPER
In addition to an excessively overbought short-term technical condition, the copper market this morning is facing a massive single week jump in Shanghai exchange warehouse stocks, risk off in equities and a setback in high flying aluminum prices. Before the massive inflow to Shanghai copper warehouses, world copper supply was reaching down to extremely tight levels. Total copper supply across all three futures exchanges totaled only 200,402 tons at the end of January, with last year producing the 4th consecutive annual decline in those supplies.
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