Written Commentary
GOLD / SILVER
With gold and silver trading higher this morning apparently in sync with equities it would appear as if the focus of the gold trade has indeed shifted toward classic commodity standing where physical demand trumps flight to quality. On the other hand, it is possible that some flight to quality buyers moved into gold and silver this morning following reports that North Korea had bombed a South Korean installation.
PLATINUM
In retrospect, the PGM markets did manage to hook around to the upside from the aggressive liquidation pattern seen from the prior 4 trading sessions but we are not confident that the markets can forge sustained gains as the bull camp lacks a definitive and fresh storyline. However the trade has managed to spend Chinese economic data into a slight positive by focusing on the industrial production reading for May which improved from the prior month even though that reading was below expectations.
COPPER
While copper prices are trading higher early today, we are a little disappointed in the magnitude of the gains given that copper is fresh off a 4 day high to low washout of $0.16 and because of news that China approved yet another scrap copper import quota of 1570 tons. In fact the market was also presented with a UBS prediction that copper will see a deficit in the 2nd half of 2020. UBS also raised its forecasted price by 8% from a previous forecast.
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