Written Commentary
GOLD & SILVER
On the one hand, the gold market at the end of last week saw a key chart support failure and downside extension from stop loss selling, and that should leave the bear camp in control to start the new trading week. On the other hand, the gold market last week initially held up impressively in the face of an aggressive US interest rate hike and a significant upside surge in the US dollar before succumbing to the big picture broad-based commodity market meltdown. However, with foreign central banks promising to raise rates in sync with the US, the dollar expected to aggressively extend its upside breakout and reports earlier last week of slower gold shipments into China, the gold market looks to be under ongoing pressure from inside and outside market forces.
PALLADIUM & PLATINUM
Like other precious metal markets and many physical commodities markets, the December palladium contract posted a very damaging downside failure at the end of last week and could be poised for a quick slide down to even numbers at $2,000. Unfortunately for the bull camp, platinum ETF holdings continued to decline precipitously with the most recent outflow pegged at 5,060 ounces and year-to-date holdings down by 13%. Certainly, the declines in prices since the COT report mark off ($80) suggests the net long is “overstated” but not “mostly liquidated” yet.
COPPER
In addition to copper entering last week’s action short-term overbought from both fundamental and technical perspectives, the extremely bearish shift in macroeconomics leaves December copper vulnerable to a failure at $3.25 early this week.
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