Written Commentary
GOLD & SILVER
With the dollar showing signs of extending its recovery off the late May low again today, interest rates taking higher and the Royal Bank of India raising interest rates overnight the initial fundamental bias in gold and silver is pointing downward. However, the Perth Mint saw gold sales jump 22% last month and the Indian Central bank chief suggested total Indian import demand suggests a recovery in domestic economic activity. In a minor bearish development for silver, ETF holdings yesterday declined by a rather significant 4.1 million ounces and holdings are now 2.2% lower on the year. While gold and silver have not shown a tight correlation with the ebb and flow of classic inflation developments, it appeared as if the markets snapped back into their inflationary focus yesterday.
PALLADIUM & PLATINUM
Obviously, the palladium market should be much higher on its charts with the difficulty of obtaining Russian palladium supply evident for months. In fact, September palladium into the low yesterday was trading nearly $400 below the level of prices when the war started. Unfortunately for the bull camp palladium ETF holdings are down 7.7% year to date and despite prices nearing past consolidation low (Cheap) price levels. Unfortunately for platinum bulls there are several bearish factors serving to limit ongoing gains in platinum prices. First, year-to-date platinum ETF holdings are down by 6.6%. Secondly, the market has recently encountered a distinct softening of US car sales and South African platinum mining unions have agreed to new long-term contracts.
COPPER
On one day, the copper trade is upbeat toward the prospect of a noted improvement in Chinese copper demand, only to shift their view 180 degrees the next day. With an extended trend of declining LME daily copper warehouse stocks (one daily build, many moderate declines, and several very large extractions over the past several weeks), supply fears remain in play. In fact, yesterday daily LME copper warehouse stocks fell 3,875 tons after falling by a very significant 20,200 tonnes on Monday.
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