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Weakness in Gold & Silver Prices


Weakness in gold and silver prices this morning ahead of a widely anticipated reading on US consumer inflation highlights the market’s bearish tilt. Expectations for today’s US CPI project a month over month increase of 0.4%, which would be a slight downtick from the prior month and could surprisingly deflate inflation chatter as many in the trade think inflation is poised to perpetuate.


With headlines overnight touting a surge in Chinese infections and fears of soft vehicle sales have left palladium in a freefall. Therefore, we expect the beating to continue in the palladium market despite the likelihood that spec short positioning is posting fresh record short readings with each daily decline. Given the severe ongoing downdraft in palladium, the ongoing washout in platinum appears to be largely a sympathy reaction.


In retrospect, a quasi-double high after a massive 3 day low to high rally of $0.27 suggests a blow off top has taken place and that copper is now poised to fall back into the $4.40 and $4.20 sideways consolidation pattern. While copper should draft support from a 4,400 ton decline in LME copper warehouse stocks overnight that supportive issue is countervailed by a series of stories out of China indicating their intentions to slow industrial production in certain areas to contain inflation.

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