Written Commentary
COPPER
Chinese demand concerns returned to a front-and-center position and if the market does not receive positive news later today, copper will finish the week on a downbeat note. May copper gave up sizable early gains before finishing Thursday with a mild gain, and it has followed through to the downside with moderate early losses this morning. Shanghai exchange copper stocks were 1,305 tonnes lower for the week at 285,090 tonnes, breaking an 11-week streak of increases. However, this decline is only a fraction of over 255,000 tonne buildup since the start of this year. Both the Shanghai Composite and Hong Kong Hang Seng posted sizable losses today which may reinforce concern over China’s near-term copper demand prospects.
GOLD & SILVER
After a strong start to Thursday post-FOMC, precious metals fell back from early highs with gold finishing with a moderate gain while silver had an outside-day lower close and a reversal from a 3 1/2-month high, and both metals have followed through to the downside early in today’s action. Going into the weekend and with one holiday-shortened week left in the first quarter, both metals are vulnerable to profit-taking and additional long liquidation today. The FOMC meeting results maintained the Fed’s projection of 75 basis points in rate cuts by the end of this year, and that has increased the chances for a June rate cut which in turn provided a boost to the precious metals. A surprise Swiss rate cut was followed by the Bank of England’s signal that they will cut UK rates later this year, both of which gave an added boost to gold prices. The PGM metals were able to maintain a positive tone Thursday, but they have found early pressure and are posting mild losses early today.
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