Written Commentary
GOLD & SILVER
The gold market turned sharply lower on Monday, in a rejection of last Friday’s rally in the wake of the CPI report. It fell further overnight, but it did manage to bounce off the lows. On Friday, it appeared that gold market had embraced its role as a hedge against runaway inflation, as opposed to falling victim an aggressive Fed and a strong dollar. It would probably take some stabilization in the stock market for gold to capture more buying interest.
PALLADIUM & PLATINUM
Platinum and palladium continued their declines on Monday that had begun in the wake of Friday’s surprisingly high CPI report. The trade fears that the Fed will be forced to get more aggressive with raising rates to rein-in inflation, which would increase the chance of recession and hurt industrial demand, included for auto-catalysts. Sharply lower equity and bond markets and stronger dollar also pressured the markets.
COPPER
The copper market continues to deal with bearish Chinese demand developments. September copper fell to a new 3 1/2 week low on Monday for its third straight down day. A rebound in Chinese equities provided some support overnight, but the market has fallen back into negative territory coming into this morning’s action. A “ferocious” COVID outbreak in Beijing has clouded China’s demand outlook on ideas that this it could lead to COVID restrictions being reintroduced in other major cities. This could remain a major source of pressure on the market until there are signs that the outbreak is easing.
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