Written Commentary
GOLD & SILVER
Despite significant daily outflows from gold and silver ETF holdings yesterday, gold and silver have started out on a very constructive track. While the dollar has started off under pressure the magnitude of the movement in the dollar is not justification for the strong opening rally in precious metal prices today. Furthermore, generally higher global equity markets and little change in US treasury yields suggest a noted impact from other outside markets. Furthermore, the gold and silver markets are higher despite comments from the Fed’s Bullard indicating he prefers “frontloading” aggressive rate hikes to contain price pressures arising from geopolitical tensions. The initial gains this morning are even more impressive considering demand warnings from the World Gold Council with respect to India.
PALLADIUM & PLATINUM
With the most recent ETF flows available showing a daily decline of 3,433 ounces of palladium and a decline of 132 ounces in platinum, news from the investment sector remains bearish. In fact, platinum ETF holdings are now down 11% year-to-date while palladium holdings are down by 15%.
COPPER
A combination of US/Chinese political tensions over Taiwan and fresh hawkish dialogue from the US Federal Reserve yesterday has fostered ongoing copper demand fear. Even though the official US contingent has left Taiwan, tensions remain in place because of Chinese military “exercises” involving live fire around Taiwan. Yet another negative influence on copper prices this morning are widespread expectations of another fifty -basis point rate hike from the Bank of England.
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