GOLD & SILVER
While the US Federal Reserve Chairman this week indicated the Fed is data dependent and undecided on the magnitude of the March 22nd rate hike, the pendulum continues to swing toward a 50-basis point hike. However, despite Fed insistence that they are not targeting jobs, today’s US economic report slate will be limited to jobs data and therefore the gold and silver markets will be especially sensitive to interest rate and US dollar action. According to some economist’s strong jobs readings are threatening to the Fed and gives them the latitude to be more aggressive without increased threats of recession. Nonetheless, the path of least resistance remains down in gold and silver with inside and outside market factors expected to pressure prices again today.
Even though the platinum market has not garnered a big lift from supportive demand news coverage from Dow Jones overnight indicating it has become “the new PGM darling” the bias is up with a higher low and early track in positive territory today. The platinum trade has already been presented with a very bullish 2023 global platinum deficit forecast of 556,000 ounces which is a major shift from 2 prior years of surpluses.
Fortunately for the bull camp the copper trade is presented with mixed overnight developments with a delayed COT positioning report showing a nearly flat net spec and fund positioning which partially offsets chatter of Chinese copper exports. Even though the movement of Chinese stocks to LME facilities has been known for several days, the argument that the rotation is capitalizing on arbitrage opportunities is clearly challenged by the prospect of soft demand inside China. Apparently at least 45,000 tons of refined copper is expected to be delivered to LME warehouses from major Chinese smelting operations and that should have applied significant pressure to prices early this morning.
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