Written Commentary
GOLD & SILVER
The Dollar continues to be the primary driving force behind the direction of gold and silver prices. Late last week, the dollar showed signs of extending its downward slide from mid-May which in turn produced the highest gold trade since May 9th. With the gold and silver trade maintaining its focus on the dollar through last week’s US jobs news, the ebb and flow of economic uncertainty remains secondary. Over the weekend, the Russian Federation banned personal income tax on the sale of gold which could put more physical gold in motion in Russia. However, exports of Russian gold are still likely to be restricted significantly.
PALLADIUM & PLATINUM
While it would seem like palladium fundamentals are relatively stable and the recent positioning report in palladium held close to a record spec and fund short ground (record 4,231 net short contracts) the charts suggest the bias is pointing down. In a unique combination, the platinum market has exploded by $130 from the May low and in the process its net spec and fund long has barely expanded and remains near the lowest level since October 2018! Like palladium, the platinum fundamentals are very scarce especially after African mineworker unions reached labor deals.
COPPER
Not surprisingly, the copper market fell back into the close Friday after forging a low to high rally of $0.30. However, copper prices should see support from news that Chilean copper production in April declined by 8.9%! While the reopening of Shanghai and a slightly positive Chinese scheduled data point last week justified some upside action, we view the rally last week as overdone.
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