Blog posts tagged with 'copper'

While the CME Fed watch tool pegs the probability of rate cuts in the January, March, and May Fed meetings at 2.6%, 48.1%, and 50.1% respectively we feel there is a slightly higher whisper expectation for a rate cut in the market.

However, with the Feds favored inflation measure (PCE) scheduled for release today and expectations calling for a +0.2%, the prospect of a near-term cut in US rates should remain very small.

In fact, to see a rate cut by the June meeting will likely require some contractionary monthly PCE readings...[MORE]

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With outside market forces of lower US rates and a weaker US dollar, both gold and silver started the Wednesday trade with a relatively strong bid.

In fact, as of this writing the dollar sat just above a downside breakout and a six-day low which could result in gold and silver adding to the early noted gains.

For a change, the silver market could take a leadership role with Fresnillo projecting 2024 silver production to be 7 million ounces below 2023. Unfortunately for the bull camp, Fresnillo also posted a 13% year-over-year increase in silver production for 2023...[MORE]

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Apparently, severe losses in Chinese equity markets has prompted Chinese officials to consider implementing a $278 billion rescue package.

Therefore, gold may see some limited flight to quality buying interest, but as mentioned many times over the last year, the gold and silver trade are not as sensitive to flight to quality events as in the past.

On the other hand, if the situation becomes dire and there is a chance of contagion that could pull in a noted measure of spec and fund longs...[MORE]

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While the US dollar is showing some vulnerability on its charts early today, treasury yields may have temporarily peaked leaving the primary outside market influences slightly supportive of gold.

However, we see no reason to take control away from the bear camp with the hedge funds reducing their long positioning last week, another week of ETF holding declines, an overbought net spec and fund positioning, a residual negative global commodity market environment, and perhaps most importantly from growing economic concerns in China.

With the last COT positioning report showing the net spec and fund long in gold near the highest levels since May 2022, falling trading volume and declining open interest on last week's recovery bounce, the bear camp retains control over the trend...[MORE]

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While the gold and silver markets are showing initial strength this morning, outside market action leaves the bear camp with a prevailing edge.

In fact, despite initial weakness in the dollar, disastrous retail sales readings from the UK should leave the dollar in favor and physical commodities like gold off balance.

Furthermore, US treasury yields have clawed higher this week with yields overnight reaching the highest level since December 13th...[MORE]

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While February gold did not post a lower low trade overnight, fundamental developments favor more declines and a trade below $2000.

In addition to hawkish ECB dialogue predicting no rate cuts until summer, expectations for a US cut have been pushed further into the future with US data continuing to signal an economy holding together which in turn has been accompanied by a consistent reduction in the probability of a first quarter US rate cut.

However, the bull camp should get some credit for prices tracking in positive territory this morning especially with the Chinese Premier discounting the prospects of a stimulus package from the government...[MORE]

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Fortunately for the bull camp in gold and silver the upside breakout extension in the dollar overnight has been offset by a minimal decline in US treasury yields.

However, the charts in the dollar project higher action ahead, and the US economic reports slate today is very active potentially rekindling rate cut timing debate.

In the end, the dollar is underpinned, and gold is pressured from Fed Gov. Waller's comments yesterday cautioning the Fed against rushing to cut rates before establishing inflation has been slayed...[MORE]

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In addition to gapping higher overnight, the dollar index reached the highest level since December 13th in a reaction that appears to carry follow-through potential.

Adding to the bearish track for gold and silver to start the new trading week, US treasury yields are climbing and gold ETF holdings at the end of last week had posted nine straight days of outflows, with holdings last week reduced by 656,635 ounces. Year-to-date gold ETF holdings are already down 1.2% while silver ETF holdings are down only 0.6% year-to-date. 

From a longer-term perspective, the gold market could see lift from Chinese President Xi Jinping who announced China would push for high-quality development of its financial sector and would accelerate the creation of a modern financial system as that necessitates the need for a faster expansion of Chinese central bank gold reserves to backstop its currency in the eyes of the world trade...[MORE]

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With the dollar slightly higher and US treasuries flat a $24 rally in gold and a $0.40 rally in silver is likely the result of US and Great Britain attacks on suspected Yemeni terrorists' strongholds inside Yemen.

Apparently, the oil and precious metal markets see the onshore strikes in Yemen as an escalation and perhaps a catalyst for an expansion of military aggression in the area.

While the crude oil market is only up $2.40, a flight-to-quality situation is unfolding and has sparked an unusual migration to gold and silver...[MORE]

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While events that are widely anticipated to present significant volatility can sometimes be disappointing with a muted response, the stakes for many financial markets are significant today as the pendulum of expectations for an early US rate cut has been pulled down with a series of US Fed speeches generally indicating the fight against inflation is not complete yet.

Fortunately for the bull camp in gold and silver the action in bond and dollar markets this week has not shifted definitively bearish from the reduction in rate cut expectations but today presents a possible breakout session with a dollar trade above 102.385 a big problem for the bull camp.

On the other hand, a trade in the dollar below 101.835 could save the day for the bull camp and launch February gold above $2050...[MORE]

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