Written Commentary
GOLD & SILVER
Gold and silver were both lower overnight as the market seemed to be consolidating ahead of China and US inflation numbers. It is often the case that intense focus on a singular event fails to result in any significant volatility or a set major trend, but the upcoming Chinese CPI and PPI (Thursday evening in the US) and US CPI numbers (Friday morning) for May could be a major junction for any market that is impacted by financial market gyrations.
PALLADIUM & PLATINUM
In retrospect, a bidding war for a smallish South African platinum mining company might have sparked the gains in platinum from the May spike low. The gains are suspect given the lack of strength in palladium and any tangible fundamental developments. This suggests both platinum and palladium are best analyzed from what can be seen on the charts and positioning reports. Palladium appears cheap relative to platinum, it has a significant supply threat, and the spec and fund traders have a near-record net short position.
COPPER
Copper prices fell back on the defensive overnight and reached their lowest level in a week. The Chinese trade balance data included a stronger than expected May exports reading, which may be seen as a positive their economy and therefore copper consumption. Imports of unwrought copper and copper ore & concentrates came in above last year’s numbers, which also indicated improving demand.
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