Written Commentary
GOLD / SILVER
After a rough start to February, the tide may have turned for gold prices as they remain well clear of Monday’s low. Silver prices have reached a 2-week low while platinum and palladium are also under moderate early pressure. The Dollar has extended its pullback after a surprise downtick from a private survey of US economic optimism, which carried more weight with the market than usual on Tuesday as there were no top-tier US economic numbers to digest. A series of Fed speakers avoided any definitively hawkish statements, and that combined with the pullback in the Dollar provided a key source of support to gold and silver prices. While their comments were not outright dovish, a slight pullback in US longer-term yields following the Fed commentary also strengthened precious metals prices. China’s demand outlook may have improved with this week’s positive turnaround in Chinese equity markets, while gold and silver received additional carryover support from crude oil prices as they extended a recovery from Monday’s low.
COPPER
Copper prices were able to break a 3-session losing streak on Tuesday but may need to receive more positive demand news from China to regain upside momentum. A second day of Chinese equity markets strength has helped to soothe Chinese copper demand concerns and supported prices. With the Shanghai Composite still close to Monday’s 1-year low, copper may need to see continued strength in Chinese equities to sustain upside momentum. The eleventh daily decline in a row for LME copper stocks has supported the market as stock outflows bode well for the global demand outlook. Chile’s Codelco said that their 2023 copper mine production was 1.325 million tonnes which was their lowest output in 25 years.
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