Written Commentary
GOLD & SILVER
With October gold aggressively rejecting an 8-day low yesterday, with a recovery within the session of $23.00, and further gains this morning the bear camp is rocked back on its heels! In retrospect, seeing the gold and silver markets regain positive ground in the face of a huge dollar rally yesterday and a jump in US interest rates yesterday suggest the markets found some form of value at this week’s lows. However, the recovery in the dollar has been very impressive and could signal the potential for a sustained recovery.
PALLADIUM & PLATINUM
The palladium market continues to coil within a range bound by $2,090 on the upside and $1,944 on the downside as if some trend decision is ahead! With the front month contract switching to September strong value is seen at $1,910 and with palladium not trading higher with platinum yesterday, the case for range trading is solidified. However, September platinum has close in uptrend channel support (from the late May rally) at $1,989.50. As indicated already, platinum and palladium diverged significantly on Wednesday with platinum surging to the highest level since April 19th. Apparently, according to Bloomberg a $3 billion platinum mining facility in Zimbabwe physically collapsed and that is a supportive near-term development.
COPPER
In addition to bullish news that Chinese April copper production declined by 9.8%, a Chinese manufacturing PMI reading came in positive and remote satellite imagery indicates global copper smelting activity is on the rise. Furthermore, LME copper warehouse stocks have declined for 10 straight sessions while protests at Peruvian copper mines have escalated with two fires (suspected arson) at beleaguered copper mining companies noted earlier this week. With the decline in LME copper warehouse stocks on Wednesday (today the exchange is closed for a spring banking holiday), the exchange has posted the first 10-day pattern of declines since early February.
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