Written Commentary
GOLD / SILVER
In our opinion, the gold and silver markets are not able to benefit from flight to quality associated with the surge in Delta variant infections but might be in position to benefit in the event of economic uncertainty following US jobs related data later this morning. From the overnight news, several central banks have indicated they will remain accommodative with policies because of infections and the trade continues to expect some type of Chinese stimulus program.
PALLADIUM / PLATINUM
All things considered, the PGM markets held up impressively in the face of a very disappointing US vehicle sales reading for July and have held up impressively in the face of deteriorating global economic psychology brought on by surging infections. Furthermore, the PGM markets held up in the face of very discouraging US jobs related data and periodic strength in the dollar. Unfortunately for the bull camp, the charts in the palladium market remain negative with lower highs and the inability to close above $2,700. The platinum market clearly “broke down” with the failure yesterday and appears to be on track to test and perhaps temporarily fail at the $1,000 level.
COPPER
According to news reports on Wednesday, the capital city of China (Beijing) is fighting to control the spread of the Delta variant. Apparently, the government is already moving to isolate sections of the city and restricting train capacity and that is obviously a threat against copper demand. We also suspect that disappointing US scheduled data, strength in the US dollar and weakness in energy prices will add to the bearish sentiment in copper.
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