Written Commentary
GOLD / SILVER
Just seeing news reports of a massive explosion in the capitol city of Ukraine last night provides flight to quality lift for gold and silver and most specifically palladium. However, the potential for a gold mining strike in Africa could also provide support for gold today but that news will likely take a backseat. The situation in Ukraine continues to attract gold ETF investment with year-to-date gold holdings now up 3.4%. On the other hand, while silver ETFs were down overnight, they remain 2.1% higher on the year and provided investors with a greater return than gold last month. Gold and silver prices could have been tracking lower this morning following Powell’s telegraphing of the March rate hike, but also from the Fed Beige book which noted inflationary spiral concerns.
PALLADIUM / PLATINUM
The palladium market continues to rally as if the flow of Russian PGM supply will be at least temporarily disrupted. Some supply is likely to be delayed because of port congestion and fears by shipowners their cargoes and ships could be seized. Carmakers are already expressing alarm at the upward price pressure on neon gas, palladium, and nickel, as that in turn will likely result in increased retail car and vehicle prices. With the highest close since early August and a uncertainty spiraling, more gains and more volatility are likely in June Palladium. While the platinum market continues to be pulled higher by palladium, the market lacks definitive speculative buzz.
COPPER
The copper market continues to draft support from ongoing gains in crude oil, grains and most significantly from surging oil and aluminum prices. While copper probably drafted support from favorable Chinese manufacturing PMI readings earlier this week, overnight Chinese economic data flipped negative which should temper copper demand hopes. As indicated in several other markets recently, the copper bulls do not need formal sanctions against Russian copper exports to see copper prices rally off precarious supply conditions.
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