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Metals Prices Under Pressure


Gold and silver remain under pressure from this week’s pulse up in interest rates with some rates reaching up to the highest level in 13 months. In other words, metal traders are fearful that rising market/real interest rates will reduce the prospects of inflation, at-the-same time that rising US interest rates could suddenly lift the dollar if foreign investors decide to pile into US Treasuries in search of marginally higher rates of return than are available elsewhere.


While the platinum market certainly came under pressure because of a definitive “risk off” environment yesterday, the market was also undermined as-a-result of a 11,000-ounce reduction of ETF holdings on Wednesday. While the June palladium contract ranged sharply higher yesterday, it has reversed sharply from that 2-month high and at times is trading a startling $85 per ounce below this week’s high.


While the copper market has shown reversal action frequently from new highs for the move, Thursday’s action is a signal of further corrective weakness. In fact, US housing data on Thursday was disappointing, hard equity market declines have dented global sentiment this week and the fear of rising US interest rates is permeating throughout the markets despite a bounce in Treasury prices this morning.


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