Written Commentary
GOLD & SILVER
With the dollar breaking out to the upside, general risk off sentiment in place and an unsatisfying sustained bullish reaction to lingering inflation, the bull case is lacking. Not surprising, investors also remain cool toward gold with ETF holdings reduced for the 5th straight session, which in turn reduces the year-to-date gain to 8%. Seeing gold and silver link with equities is a sign that precious metal markets are trading like classic physical commodities.
PALLADIUM & PLATINUM
While fundamental news flow on the palladium market has been extremely thin, that has not prevented a spike below $2,000 overnight. However, even with supportive supply-side fundamentals from and 8.2% decline in March South African PGM output (year-over-year), palladium and platinum are falling victim to big picture broad-based physical commodity market selling. Unfortunately for the bull camp, palladium ETF holdings declined for a 7th day yesterday with the year-to-date level of holdings now down by 5.3%.
COPPER
Not surprisingly, July copper has knifed through a series of chart support levels and appears poised to fall below the $4.00 level. Obviously, a lack of loosening of activity restrictions in China, ongoing gains in LME copper warehouse stocks, big picture broad-based selling of nearly all physical commodities and fears of global slowing leave a very persuasive bear environment in place.
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