Written Commentary
GOLD / SILVER
Overnight Chinese inflation data was mixed with factory prices hot and consumer prices contracting on a month over month basis. Therefore, gold and silver missed out on an opportunity to foment inflationary conditions and provide consistent buying to precious metals. However, the inflation readings in China (like the US payroll data last week) allow for the Chinese central bank to leave rates lower for longer.
PLATINUM / PALLADIUM
Obviously, the palladium market has experienced concentrated bargain-hunting buying following the tremendous washout last Friday with the 2-day trading range of $175 suggesting the market retains significant buying fuel. With the platinum market breaking out to the highest trade since February 24th and prices trading at a $1,700 discount to palladium some rotational buying might be underway.
COPPER
It would appear as if the copper market has entered a period of increased volatility following 2 days of wild action. On one hand, China’s appetite for copper combined with new pollution restrictions there have sharply increased their demand for international supply, but on the other hand there are signs that the Chinese government could attempt to reign in surging material prices with some type of intervention. On the other hand, LME copper warehouse stocks continue to fall at a moderate pace.
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