Written Commentary
The bulls hold the edge, but bullish buzz is very modest
GOLD / SILVER
The question for the gold and silver trade this week is which markets will show up as both markets have had a lot of starts and stops and have had difficulty trending. Certainly, seeing the dramatic downside thrust in the dollar and a cyber-attack on a key US pipeline provides a bullish fundamental foundation to start, which is needed to underpin the markets after large-concentrated gains last Thursday and Friday.
PALLADIUM
While the palladium market ranged down sharply last Friday and carved out a high to low washout of nearly $200 an ounce, the market rebounded and closed an impressive $102 from the low. It should be noted that palladium open interest continues to rise suggesting that traders are not overly anxious about record price levels.
COPPER
Strength in Iron Ore (Record high) and indications that Chinese smelters will buy less copper concentrate (pollution control buy refined copper outside the country) provides the market with bullish buzz to start the new trading week. With a massive range up thrust into new all-time high ground again this morning and Goldman projecting a further rise of 10% in the coming 12 months, the copper market appears to be a primary inflation tool. In fact, with signs of a strong Chinese economy last week and tightening LME copper stocks that leaves both supply and demand in favor of the bull camp.
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