Blog posts tagged with 'copper'

While the gold and silver markets are showing positive action early today, both markets look to face a small measure of outside market pressure from a tick higher in US treasury yields and a higher high versus Thursday in the US dollar.

While the gold and silver trade were lifted off the recent low by a glimmer of hope for a US rate cut earlier this (the best odd of a cut is 51.1% for the September Fed meeting) the impact from the Fed yesterday shifted slightly negative with at least two members indicating borrowing costs need to stay higher for longer!

Based on overnight Chinese economic data (particularly retail sales came in softer than expected and house prices fell more than expected), the outlook for the Chinese economy and therefore precious metals and commodities was saved by a very unusual and direct Chinese government support for the Chinese housing market...[MORE]

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While yesterday's sharp gains in gold and silver were partly supported by outside market action (lower treasury yields, a weaker dollar, and renewed US rate cut hopes), we continue to think there are classic flight to quality buyers moving into gold and silver as hedges against a geopolitical or financial market crisis ahead.

Even though the prospect of a significant crisis and the potential flight to quality influences from a crisis, gold has displayed significant corrective action in the face of the escalation of the Middle East conflict in the recent past.

However, ideas that runaway inflation was behind the recent record run-up in gold and silver prices suffered a significant blow yesterday when the US core CPI reading posted the first softening in six months...[MORE]

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Not only did the Fed's Powell thwart a surge in inflationary fears following yesterday's hotter-than-expected US PPI readings, but he also seems to have rekindled US rate cut hopes!

However, the second critical monthly US inflation reading in the form of CPI later this morning will be difficult to discount if it posts hotter than expected readings.

Certainly, the gold and silver markets will continue to track and react to the ebb and flow of US rate cut prospects, but with strength in a wide array of physical commodities, a breakdown in the US dollar, steady to lower US interest rates, and the potential for fresh inflation fuel from US and Chinese trade tariffs, it is possible that gold and silver will begin to behave like inflationary hedges...[MORE]

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While international inflation measures might not actually correlate with inflation in the US, the markets overnight were presented with an avalanche of inflation readings registering a range of results from steady to red-hot.

In fact, beyond the standard scheduled inflation reports, the markets also saw Japanese and Indian April wholesale price index readings jump at the fastest pace in over a year.

However, many central bankers and economists see inflation coming under control throughout the world which in turn makes today's US PPI and tomorrow's US CPI a critical juncture for global inflationary expectations...[MORE]

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Apparently, gold and silver traders have had a change of heart over the weekend as the recent revival of US rate cut hopes have seemingly dissipated overnight perhaps because of the prospect of lingering inflation signals from the US PPI report tomorrow.

However, expectations for the report call for a 0.2% gain, which will match the previous month, and in turn that could mean inflation has continued to grow over the last four weeks albeit at a softer rate.

In another negative, the gold market continues to see signs of high price adversity in the Indian gold trade...[MORE]

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While we understand the premise, seeing gold and silver explode on the upside from a revival of US rate cut hopes appears to be an overreaction.

In fact, outside market impacts from treasuries, currencies, and oil prices this morning are not registering noted action seemingly indicating the metals rallies are occurring in isolation.

Sentiment is so bullish that expectations toward US CPI and PPI next week are factoring in a downtick in inflation which in turn translates into higher rate cut expectations...[MORE]

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While we don't expect to see significant gold and silver price reactions to today's US jobs-related data, a higher high in the dollar early on, slightly higher US interest rates, and a series of lower highs and lower lows in gold this week leaves the bear camp with an edge.

On the other hand, the trade is expecting a slight increase in continuing and initial jobless claims and that could provide a brief lift for prices.

However, favorable Chinese trade data and a report of an improvement in the Chinese homebuyer market should boost expectations for better Chinese gold demand...[MORE]

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With the US dollar posting a four-day high overnight and the bias shifting slightly back toward a hawkish vibe (following Minneapolis Fed Pres. comments suggesting the Fed might be on hold through the end of the year) the bias in gold and silver is down to start today.

Furthermore, the gold market remains under residual pressure from news yesterday that PBOC gold buying last month slowed perhaps because of the unending record price run.

However, the Peoples Bank of China extended its record of 18 straight monthly additions to reserves with a very minimal purchase of 60,000 ounces which is down 100,000 ounces from March and a very explosive 390,000 ounces below February...[MORE]

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While the #gold market forged a quasi-upside breakout yesterday the market has fallen back into a building consolidation zone largely situated between $2352 and $2285.

In general, we suspect gold and #silver will continue to benefit from geopolitical flight to quality buying (especially with the Israelis launching their attack on the southern city of Rafah) and somewhat less from the dovish pivot in sentiment toward US interest rates following last week's data.

However, the bull camp should be very discouraged with the lack of gains in gold and silver this morning given the Israeli offensive...[MORE]

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With relative calm in the Middle East apparently poised to end soon with an Israeli attack on the southern Gaza city of Rafah, it is not surprising to see gold and silver leap higher to start the new week.

While overnight news coverage of the markets suggests gold is rising off US rate cut hopes for later this year, we suspect rate cut hopes are a minimal portion of the fuel for this morning's gains.

Classic demand signals were present overnight with the Perth mint April gold sales doubled from March sales while silver sales declined to their lowest level since December...[MORE]

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