Written Commentary
GOLD / SILVER
Gold and silver have been unable to forged noted recovery action off the aggressive vaccine washout, even though US infections are exploding and that should be fostering some form of renewed flight to quality interest. However, ETF’s continue to see outflows, with gold yesterday posted a 5th straight decline and silver posting an outflow of 1.1 million ounces.
PLATINUM / PALLADIUM
While we are a little concerned with the magnitude of the gains in platinum off long term deficit predictions, the added kicker of recent talk of substitution for palladium by platinum in industrial products provides a broader bull case. In fact, platinum prices remain near historically large discount prices to palladium ($1,410) and with some car industry officials suggesting it takes two years to begin to implement changes in auto manufacturing processes, rotation is certainly possible now given the duration of the huge price discount. It has been almost 3 years since palladium prices began to rise sharply above platinum, with the most significant premium gain of palladium over platinum taking place at the end of last year.
COPPER
From a psychological perspective seeing Chinese copper futures debut with a lower trade should discourage some buyers today. Adding into the negative bias this morning are signs of selling from the LME specifically off virus counts. Furthermore, news that Zambian copper mine production this year increased by 9.45% cuts into the idea that pandemic shutdowns reduced world supply.
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