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Negative Physical Commodities Sentiment


Short-term sentiment has shifted negative for gold and silver with yesterday’s failed spike up rally in the dollar seemingly puncturing bullish sentiment. However, the dollar has given up yesterday’s gains and appears to be headed back to consolidation support, but without significant weakness in the dollar, later today we suspect gold and silver will remain under pressure into the FOMC announcement. Adding to the negative bias is outflows in both gold and silver ETFs of 118,446 ounces in gold and 1.3 million ounce in silver. As in other physical commodity markets yesterday, both gold and silver recovered after very significant early declines and that might reduce the vulnerability today through important US Federal Reserve statements.

Gold Bars and US Currency


While we see the PGM markets tracking lower with gold, silver, and other physical commodities for most of today’s session, a key fundamental in the form of increased investment flows may be shifting in favor of the bull camp. In addition to platinum registering several large daily ETF inflows over the last week, palladium holdings yesterday increased by 5,349 ounces and are now 1.1% higher year-to-date. Platinum ETF holdings have jumped from 2.333 million ounces on January 17th to 2.357 million ounces, but it is premature to suggest a trend of rising investment. Even though the PGM markets are not tracking the ebb and flow of macroeconomic sentiment tightly daily slightly disappointing Chinese PMI data last night and fear of the Fed should leave both platinum and palladium under initial pressure today.


With a slightly disappointing Caixin Chinese PMI reading overnight contradicting positive Chinese PMI data from earlier in the week, the hope for expanding Chinese copper demand has been tempered. However, ongoing fears of tight global supply in copper are likely to remain in play, especially with Glencore today registering a 12% decline in 2022 copper production. In another bullish supply development overnight Chilean National Bureau of Statistics announced a decline in December copper production of 8.4% on a month over month basis with year-over-year production falling by 5%. Traders should logically expect copper to remain under pressure with the potential for another spike-down trade.

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