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Looming Rate Hike Has Metal Bias Lower

GOLD & SILVER

The path of least resistance is pointing down in gold again today, with economic slowing fears remaining in place, gold ETF holdings falling for a 6th straight session (silver holdings fell for a 3rd straight day) and an interest rate hike from New Zealand. Obviously, the major weight hanging on gold is the looming widely anticipated 50 basis point rate hike from the US Federal Reserve.

PALLADIUM & PLATINUM

In retrospect, the palladium market yesterday seemed to fall victim to fears of slowing global demand, the prospects of rising interest rates, a battle of attrition in the war, a surging dollar, and a deflating of inflationary expectations. Relatively speaking the platinum market held up impressively against a physical commodity market washout on Monday and in the face of fresh evidence of economic slowing.

COPPER

With the massive failure and spike down move on Monday, the charts become even more bearish. Clearly, the failure to see a loosening of activity restrictions throughout China, disappointing Chinese factory data, and disappointing US PMI and ISM data prompted fresh copper demand fears from several sources. In fact, a private consultancy sees more declines in copper ahead with suggestions that copper and iron ore prices have yet to fully register Chinese slowing.

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