let them go
market vibes
March 28…)
“Nobody should come to the movies unless he believes in heroes.” John Wayne
Inflation data on tap at 8:30.
U Mich inflation expectations at 10;00 AM EDT… off the charts in March so far.
In the Markets
From Wednesday’s all time high to this morning’s lows, copper fell 30 cents on moderate volume and held the $5.00 handle. Open interest actually went up meaning for every long that took profits, and I suspect there were a few thousand of them trading around the clock, the same number of new longs came in above $5.00. Note to self.
New short sellers may have added liquidity but I think those would have been commercial. This respite seems like a healthy flush in the context of obvious regional Asian demand (spec or commercial) and China’s plain spoken intent to get metals prices up.
Gold prices advanced yesterday and followed through over night, piercing $3100 on a modest increase in open interest and rising volume. The trend is orderly and solidly in force.
The premium for gold on the SGE is flat to mildly positive according BBG data. No stress.
Gold ETF holdings are up 4 mm toz in February; however, none of that increase is reflected in COMEX open interest. Actually, the opposite is true. I wouldn't put much trust in ETF data.
From October 2023, when gold made its low of $1800.00, ETF holdings fell 7 million ounces as gold rallied $600/toz for 8 months. The level of gold ETF holdings today is within a few ounces of where ETF holdings were when this bull move began almost two years ago. It is possible, even likely, the increase in ETF holdings has more to do with exigent EFP flows than investors piling into gold.
In my opinion, if you want to own gold, buy some. Gold ETFs are not convertible, charge fees in addition to natural carry, and guarantee nothing more than an implied correlation to spot gold returns. I'd liken them to a blow-up doll version of precious metals. As I said, in my opinion.
Silver, oil, bonds, bitcoin, the stock market and… the unknown future …straight ahead. Here we go.
