GOLD / SILVER
With a 5-day/new low for the week downside extension in the dollar, the rally in the precious metal markets this morning is not surprising. In fact, adding into the upward track is a minimal downtick in US treasury yields and a general risk on mood in most physical commodity markets. However, overall sentiment toward gold remains negative with headlines overnight from Reuters touting a significant quarterly decline in prices. While the gold and silver trade did not sustain gains off initial talk of LME efforts to ban/track Russian shipments several weeks ago, that threat is probably providing some fresh speculative bargain-hunting buying in conjunction with the chart reversals.
PALLADIUM & PLATINUM
While the December palladium contract has rebounded throughout this week and is likely drafting spillover lift from the ongoing gold rally/dollar washout today, to pierce downtrend channel resistance up at $2,264 today will probably require a dramatic expansion in risk on sentiment and or late breaking news that the LME is in fact moving to brand PGM supply to prevent Russian supply from moving through the exchange mechanism.
Apparently the bull camp in copper has shrugged off the disappointing Chinese manufacturing PMI readings perhaps because official and private readings were contradictory. We suspect the market is deriving support from a 6,438-ton decline in weekly Shanghai copper warehouse stocks, but the bigger lift today is likely the result of a risk on day in commodities and equities. On the other hand, analysis of internal Chinese physical copper supply (different than the weekly exchange stocks figures) suggests copper inventories in Chinese cash markets declined by 10,100 metric tons in the most recent week over week measurement. While the prospect of an EU ban on Russian material is supportive, the magnitude of Russian copper supply flow to the west is probably not a major bullish influence.
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