Written Commentary
GOLD / SILVER
Another new high in the dollar equals another new low in gold and ongoing but less significant pressure on silver. In addition to the cascading pressure from the strengthening dollar, both gold and silver continue to see an exodus of investment from ETF holdings. Yesterday gold ETF holdings declined by 66,197 ounces and silver holdings declined by 1.26 million ounces,
leaving net sales this year in gold at 5.15 million ounces and net sales of silver this year at 28.2 million ounces. Adding to the evidence of money fleeing gold is the fact that current gold holdings are at the lowest level since the first quarter of 2020.
COPPER
While December copper managed to avoid a lower low early today the charts remain bearish, and the fundamental news flow should add to the bear case. Even though the one-thousand-ton inflow to LME copper warehouse stocks overnight is not a large influx, stocks have reached the highest level since May of last year and have increased in 45 of the last 53 trading sessions. Also, according to some measures LME copper warehouse stocks have increased by roughly 200% since June. However potential financial problems at Chilean copper miner Codelco, the world’s largest copper producer, from production difficulties and high levels of debt and perhaps losses in other investments call into question the company’s viability.
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