Written Commentary
GOLD / SILVER
While the gold market did manage a higher high for the move early this morning, the new high was only fractions above yesterday’s high for the move. We suspect part of the buying in gold over the last 12 hours has been anticipation of today’s Producer Price Index reading which is expected to post a gain of 0.5% in the headline number. Gold and silver should see additional lift from a slight breakdown in the dollar on its charts and from ongoing bullish resiliency in treasuries.
PALLADIUM / PLATINUM
The December palladium contract technically broke out to the upside Monday and has posted another higher high early this morning and in turn posted the highest price since October 21st in a move that should put pressure on a record spec and fund short positioning to exit. It is also possible that palladium and platinum will draft some lift from today’s PPI report but only if gold extends its recent gains above $1,830.
COPPERDespite ongoing Chinese property market concerns, copper prices this morning posted a 4-day high. However, another substantial daily decline (5,975 tons) of daily LME copper warehouse stocks extends the pattern of declines with 35 of the last 37 days posting declines in LME warehouse supply. Combined LME and Shanghai warehouse stocks sit at precariously low levels (near 13-year lows) and are a key underpin of the bull case.
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