GOLD / SILVER
Despite an S&P prediction overnight that the Chinese property company situation will be an isolated event, the gold and silver markets are trading higher to start today. Obviously, the potential for a financial contagion inside China, ongoing infection issues in China, significant global equity market declines and the potential for significant Chinese stimulus provides the gold bulls with plenty of ammunition.
PLATINUM / PALLADIUM
As opposed to the gold market, the PGM markets failed to benefit from the presence of flight to quality anxiety yesterday and that is not surprising considering that platinum and palladium have generally tracked their physical commodity market fundamentals tightly over the last 2 months. However, the palladium this morning is not under pressure following news that Swiss August palladium exports were only 585 kg versus 712 kg in the prior month. Similarly, the platinum market remains under pressure because of the UBS prediction of a continued semiconductor shortage which in turn should keep global auto production at a minimum and demand for auto catalyst at a minimum.
With five days of massive losses, the bounce in copper prices this morning is not surprising especially given an International Copper Study Group forecast pegging the global copper market to have shifted back into a deficit in June from a surplus in May. The ICSG pegged the world copper market to have shifted into a deficit of 90,000 tons in June which compares to a surplus last year at this time of 67,000 tons.
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