Written Commentary
GOLD & SILVER
While the gold and silver markets are technically oversold from the downside carnage this week, both markets face another critical junction today in the form of the monthly US nonfarm payroll release. The markets are primarily concerned with the reaction in the dollar to US data with better than expected (300,000) payroll gains expected to lift the dollar and rekindle pressure on precious metals. t surprisingly, investors continued to flee gold and silver ETF holdings, with gold outflows 36,671 ounces and silver outflows yesterday at 2.5 million ounces. With another Chinese city (Shenzhen) locked down the threat against gold demand from the world’s largest consumer is not insignificant.
PALLADIUM & PLATINUM
Not surprisingly, the avalanche of bearish outside market forces in gold are pushing PGM prices lower. In short, the bear camp enters the last trading session of the week with an edge with the bull camp limited to hope that the mid-August low below $1,975 (in the December palladium contract) will temporarily cushion prices against another risk off trading session. While the PGM trade has not seen specific headline coverage suggesting Chinese demand is critical to prices, seeing China import significant PGM supplies from Russia two months ago could result in China selling some PGM stocks now.
COPPER
With another major Chinese city (Shenzhen) locked down the fresh new low for the move in copper is justified. Adding into the bearish bias to start today is an inflow of 2579 tons of copper to Shanghai copper warehouse inventories. However, LME copper stocks on the day fell 3775 tons and have seen significant daily draws throughout this week! Furthermore, a private entity overnight has pointed out further tightening in copper cathode supply in Chinese bonded areas and that brings 2022 bonded inventories down to the lowest level since the end of 2017.
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