Written Commentary
GOLD / SILVER
The gold and silver markets are tracking higher this morning off reports that aggressive Ukrainian resistance is slowing the Russian advance and therefore the upcoming Ukraine/Russian talks are less likely to result in any change in the crisis. The Russian central Bank indicated they would resume buying of gold on their domestic market starting today and that could increase global demand for gold, or the trade might see it as a sign of Russian scrambling to garner international currency from its citizens.
PALLADIUM / PLATINUM
Obviously, the ratcheting up of Western sanctions, visions of death and destruction in the press and an upward adjustment in Russian nuclear force preparedness provides a revitalized threat against palladium supply. However, the inability to hold the majority of last week’s major range up action leaves the palladium bear camp hopeful and the bull camp less convinced in their positioning. In our opinion, the potential for an international blockage of strategic metals becomes more likely with proof of atrocities against Ukrainian civilians, but also because the West is prepared to continue to raise sanctions and therefore it is becoming more likely that palladium and platinum could fall under upcoming embargoes.
COPPER
Fortunately for the bull camp in copper, the market did not see a significant run up in advance of the Russian invasion as that would have left the market vulnerable to demand destruction fears. Therefore, copper should be less fundamentally and technical technically vulnerable to a large washout.
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