Written Commentary
GOLD / SILVER
With the dollar hooking up this morning and forging a 3-day high, treasury yields breaking out to the upside, crude oil prices soft and most physical commodity markets lower today, the bias in gold from a fundamental perspective is down. However, the charts are positive with gold holding in the upper half of the prior day’s range up extension. With the World Gold Council indicating positive Chinese demand has surfaced, gold ETF holdings yesterday increasing by 15,400 ounces (up 1.3% year-to-date) and ongoing support from the Russian/Ukraine standoff the bull camp is not without some potential and therefore they could if conditions shift push prices above $1825 today.
PALLADIUM / PLATINUM
After a large range down failure on the charts yesterday the palladium market this morning has “bounced” but the market has not reversed bearish chart signals. We attribute the corrective action in palladium from the late January high to a “pause” in aggressive dialogue from the Russians, but the markets inability to rally off yesterday reports that Russian troops have reached 170,000 along the border should worry the bull camp. Furthermore, the platinum group metals, particularly palladium, were put on the defensive by a recent report that Ford Motor Company could roll back production at several assembly plants, as this was viewed as limiting to auto catalyst demand.
COPPER
The copper market starts the Tuesday trade off on a negative technical footing with a 5-day low and the approach of a key pivot point at $4.40. While strength in aluminum and Iron Ore prices from last week is a cushion to copper, news that another city in China was locked down is obviously cause for lower copper price action. In fact, copper prices at the low this morning, sit almost in the exact center of the anticipated consolidation range which should leave the potential for downside action in place.
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