Written Commentary
GOLD & SILVER
Not surprisingly, the gold market has forged another all-time high in the early trade today with a weaker dollar and slightly lower interest rates providing the flight to quality crowd with added confidence. In a very unusual development, stochastics are registering a fresh “buy” signal at the top of the range of stochastic readings over the last year! Obviously, US Fed news continues to solidify expectations of two US rate cuts, there has been further escalation of US/Chinese trade tensions and there is the potential of a major US political showdown tomorrow (the president has promised to savagely cut Democrat favored programs and order massive US government employee firing) and that gives the bull camp a wide array of bullish arguments. While many classic fundamental and technical measures point to an extremely overheated precious metal market environment, investors and physical buyers remain undeterred. In fact, overnight reports suggest that stratospheric gold prices have not dampened Indian festival demand. In fact, some Indian dealers see significant buying interest waiting on the sidelines for corrective action. While some silver analysts think strong industrial demand is the backbone of the record silver rally, seeing over 9.2 million ounces flow into silver ETF holdings on Tuesday highlights hyper speculative interest. Yesterday, silver ETF holdings fell back by 500,000 ounces while gold ETF holdings saw 149,190 ounces purchased.
COPPER
The charts in copper have shifted bearishly with prices clearly lacking the upside momentum in place prior to last week’s major reversal. Apparently, the rare earth battle between the US and China continues to escalate which in turn could involve copper without notice. Despite December copper trading near this week’s consolidation lows and at the bottom of the recent trading range, Codelco has managed to hike its 2026 European copper premium to a record high of $345 per ton hinting at some longer term residual bullishness remains in place. In other words, the theme of extremely tight supply remains in place despite contrary price action this week. An issue adding to the downward bias in copper are economic estimates of slowing Chinese GDP, a pattern of slowing global (non-US) regularly scheduled economic data and concerns that global copper flows could be halted without notice and or tariffs on copper imports could suddenly explode. On the other hand. Tariffs on copper could suddenly end, which highlights predictions of extreme volatility.
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