Written Commentary
GOLD / SILVER
Obviously, the gold charts this morning are damaged and a possible downside breakout below key support of $1780.60 could be seen if a risk-on vibe settles into the markets. Overnight, the United Nations apparently forecast a fast global recovery which in turn resulted in selling of flight to quality markets like gold, Treasuries, and silver.
PALLADIUM / PLATINUM
With the low to high bounce from this week’s low of nearly $50 and extremely negative press coverage toward the PGM markets recently it is possible that an interim low has been put in place. In fact, the palladium market managed the first inside day trading range since September 3rd but there would not appear to be a specific fundamental reason to call for a sustained bottom. Unlike the palladium market, the platinum market forged a lower low for the move yesterday and appears to be poised for more declines ahead. With the last COT positioning report in platinum showing a 5-digit net spec and fund long, the losses this week have likely brought the spec long positioning down to a “mostly liquidated” position and yet there is not a fundamental reason to pick a low.
COPPER
With the press monitoring the prospects of Chinese strategic reserve sales of a-number-of different industrial materials (now including crude oil) the copper market is likely to see thick resistance just above the $4.40 level in the December contract. However, copper rallied yesterday in tandem with significant gains in energy and grain prices, and that should embolden the bull camp from a macroeconomic perspective. We suspect part of the rally was likely the result of relief that US tapering might be delayed until November because of a moderating of inflation.
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