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Small Gains in Gold and Silver

GOLD / SILVER

With a fresh high for the move and the highest trade since March 22nd in June gold, the bull camp extends its suspect control into another trading session. The May silver contract also forged a higher high for the move, but the magnitude of the higher trade fails to depict a market with sustainable momentum. Not surprisingly, gold ETF holdings declined for 13th straight day yesterday, with year-to-date holdings now down 6.8%.

PLATINUM / PALLADIUM

The bull camp in the PGM markets is likely deflated this morning given the markets lack of upside action in the wake of bullish analyst commentary overnight. In fact, UBS reduced palladium mine supply this year by 545,000 ounces and projected a deficit of about 1 million ounces. In a significant longer-term development, the market has begun to factor in a shift in auto catalyst consumption of palladium toward platinum (next year) because of the historically wide price differential of $1400 an ounce.

COPPER

Overnight news coverage labeled the copper market as “tired” and we concur with that assessment. Furthermore, copper price action seems to be mirroring the ebb and flow of economic expectations for the Chinese economy and while recent Chinese data has picked up, many data points have been disjointed signaling a waffling economy.

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