Written Commentary
GOLD & SILVER
Despite growing global economic uncertainty and anxiety, gold and silver prices are under fresh and significant early pressure. Obviously, fresh contract highs in the dollar and the highest implied treasury futures yields since July 2011 create patently bearish conditions for all physical commodities. Therefore, seeing 30-month lows in gold to start today is justified with more declines anticipated. Not surprisingly, gold and silver ETF holdings continue to decline rapidly, with Tuesday’s outflows 239,228 ounces and 3.5 million ounces respectively.
PALLADIUM & PLATINUM
In a surprising show of strength December palladium prices have managed to hold up in the face of a broad-based physical commodity market liquidation wave. In fact, the market has managed to shrug off predictions of soft Chinese purchasing managers manufacturing expectations for tonight and have also showed little concern for surging auto loan rates which will likely cause a significant reduction in new and used car sales in the coming months. Unlike palladium, the platinum market continues to range down on the charts and continues to see outflows from ETF holdings. Therefore, platinum is falling victim to big picture negative influences of a strengthening dollar, multiyear highs in interest rates, fears of deteriorating physical demand (due to rising rates on new car loans) and from fresh technical damage on the charts.
COPPER
Conditions remain patently bearish for copper with demand destruction expectations front and center and supply news adding to the bearish mix. Obviously, an extension of risk off sentiment from earlier in the week, expectations for soft Chinese manufacturing PMI readings, a surging dollar, surging interest rates and a lack of positive news from the Chinese Covid front, leaves the bear camp with definitive control. Furthermore, US officials continue to harangue China with respect to Taiwan and that will obviously continue to chill trade relations between the US and China which in turn will produce headwinds for both the US and Chinese economies.
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