Written Commentary
GOLD & SILVER
While the August gold contract failed to sustain a 4-week upside breakout this morning, prices remain near the breakout zone and are getting a very minimal assist from signs of weakness in the dollar. From a technical perspective, traders are anticipating gold to post a 3rd weekly gain which in turn gives technical credence to the short covering bounce off the May low becoming an uptrend. With several market closures due to official holiday, the overnight trade in gold was narrowed but the charts to start are supportive.
The precious metals are likely to take significant direction from today’s US jobs data, in particular a May non-farm payrolls reading which is expected to show a seventeenth month in a row with a monthly increase of 263,000 or higher.
PALLADIUM & PLATINUM
PGM metals were able to finish Thursday on an upbeat note, but they continue to see divergent price action. Platinum’s 3-day/$85 rally up to a 10-week high was in sharp contrast to palladium holding firmly within the May/early June consolidation zone. The collapse of a Zimbabwean mining operation will prevent more than 800,000 ounces a year of platinum supply coming onto the market, which would have more than doubled that nation’s annualized output and would have added a significant amount to global annual platinum production.
COPPER
With Shanghai copper warehouse stocks for the week released yesterday posting a modest gain of 1801 tons and the LME closed for the Jubilee the market did not get the benefit of a lengthening string of daily LME copper warehouse stocks. However, the threat against supply from political/economic protests in Peru at one of the world’s largest mining complexes, leaves a tight supply theme supporting prices. The copper market virtually exploded on Thursday as prices reached a new 5 1/2 week high, in what feels like a delayed reaction to the relaxation of Shanghai’s COVID restrictions.
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