Written Commentary
GOLD & SILVER
We see the path of least resistance pointing down in gold and silver despite the initial higher pulse today. Once again, gold has stood up to a fresh high in the dollar and really surprised the trade by initially holding in the face of yesterday’s spike up in interest rates. In a fresh negative note, gold ETF holdings yesterday declined by 141,687 ounces with that outflow the largest since February 4th. In our opinion, the gold and silver trade are responding negatively to signs of inflation because of fears of more aggressive Fed action because of inflation.
PALLADIUM & PLATINUM
With the headlines from the war relatively benign this week, the large setback in palladium yesterday was likely the result of significant risk off sentiment flowing from the rate hike, floundering equities, and the resulting deterioration in global economic expectations. In other words, palladium demand concerns probably prompted long profit-taking at $2,277 (in the June contract) and that level becomes solid resistance for fresh sales. The platinum market was also undermined because of a Bank of America platinum price forecast reduction for the coming 2 years.
COPPER
With the July copper contract this morning extending yesterday’s slide in the early going, Shanghai weekly copper stocks jumping 8.1% and LME copper warehouse stocks increasing by 1,225 tons, the bear camp has an edge into the last trading session of the week. In retrospect, LME copper stocks have been building consistently for weeks with the latest reading the highest since October 21st of 2021. Furthermore, LME copper warehouse stocks are up 6 of the past 7 sessions and up 21 of the past 26 sessions.
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