Written Commentary
GOLD & SILVER
While we are surprised in the ongoing resiliency of gold and just as surprised that the cause of the current rally continues to be flight to quality interest ongoing weakness in the dollar and bullish charts clearly give the bull camp an edge. Clearly, the silver market is lagging gold with fears of slowing physical demand holding back that market.
PALLADIUM & PLATINUM
While we have difficulty understanding why a key Russian palladium miner would slash its 2022 world palladium deficit from 300,000 ounces to 100,000 ounces, that development is still an impediment to near term gains. Perhaps the reduction in supply from a Russian source is the result of pressure from Moscow to foster concerns of global tightness in another commodity because of the embargo. On the other hand, despite a smaller deficit projection, the world palladium market remains tight and should get even tighter in the future. The platinum market also flared higher and aggressively reversed that rally yesterday as if a “blow off top” was forged.
COPPER
In retrospect, the copper market probably overpriced the lessening of activity restrictions in Shanghai, especially with troublesome infection news flowing from Beijing recently. Cushioning the market against normal corrective weakness is a 4th straight decline in daily LME copper warehouse stocks, as that chain is the first outflow pattern since early March. According to some analysts, changes in warrants and deliverable statistics at the exchange suggest more LME copper stock withdrawals will be seen in the near term.
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