Written Commentary
GOLD & SILVER
While we tend to avoid forecasting trading ranges for markets, both gold and silver lack a dominating fundamental condition capable of driving prices consistently in one direction. Furthermore, both gold and silver remain heavily reliant on outside market action as classic internal supply and demand news has been scarce. However, pushed into the market we give the bear camp the edge as the overhanging deflationary commodity cloud could become entrenched. On the other hand, the gold market was presented with a very modest bearish development overnight as Russia indicated sales of gold bullion and concentrates from their domestic mines has return to normal distribution schedules to Asia. Additional negative supply side news has surfaced this week suggesting global gold production will potentially rise 4% this year and could rise as much as 6% if growth in recycled supply continues.
PALLADIUM & PLATINUM
As indicated already, we try to avoid forecasting consolidation action in our daily coverage, but palladium and platinum look to continue to mark time on their charts with sideways action. In fact, despite a lack of specific evidence of restricted Russian palladium exports, the trade has assumed regular channels of supply flow were not totally shut down and smuggling has increased. On the other hand, reports from a major Russian mining company (Polymetal) indicated that gold bullion shipments to Asia have returned to regular schedules and that in turn suggests the flow of PGM metals are also moving to the world market.
COPPER
Despite the likelihood that the net spec and fund short in copper has exploded, significant damage on the charts and rising fears of a global recession we see more declines in copper. With the Chinese President floating an optimistic Chinese growth forecast overnight the downside extension in copper prices this morning highlights overwhelmingly bearish sentiment toward copper.
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