Written Commentary
GOLD / SILVER
In a minimally supportive development for gold and a moderate supportive development for silver, ETFs added 55,396 ounces to gold holdings yesterday, with silver ETF holdings jumping by “6.2 million” ounces. Going forward the gold and silver markets should be undermined today by the looming release of the FOMC meeting minutes from last month.
PALLADIUM / PLATINUM
With negative outside market influences of rising interest rates and a strong dollar, the dip in palladium prices yesterday was justified and the initial higher action today is very surprising. It should also be noted that US February vehicle sales earlier in the week dropped to 13.7 million annualized units from 14.4 million annualized units in January. The platinum market yesterday was even weaker than the palladium market with a 5-day low producing very negative charts. In fact, with the platinum market consistently tracking lower in the face of the Russian debacle and Russia the 2nd largest producer of platinum in the world, it is clear platinum sentiment is unresponsive to bullish supply conditions.
COPPER
In retrospect, the action in the copper market yesterday looks like a blowoff top! Certainly, the copper market has received significantly supportive supply-side developments this week from news of reduced copper production from Chile. While the prospect of lost Russian copper supply has been widely factored, this week’s promise of more EU sanctions appeared to include specific references to industrial material embargoes. A negative supply-side story came from overnight forecasts of significant increases in base metals production from platinum producers (byproducts).
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