Blog posts tagged with 'copper'

The precious metals have stayed within a fairly tight trading range and are holding onto a mild positive tone coming into this morning's action.

A pullback in the dollar has provided gold and silver with early support in front of this morning's critical US inflation data after gold and silver moved below their 200-day moving averages yesterday.

Expectations for a soft US CPI report later today should strengthen the bull case if the report matches expectations of a gain of 0.1%...[MORE]

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Given the fundamental and technical events of the last two weeks, the trend in gold and silver has shifted back in favor of the bear camp.

From a technical perspective, the massive rally last week exhibited a classic blowoff top and reversal with confirmation from an explosion in trading volume and a subsequent decline in open interest.

From a fundamental perspective, the mainstay of the bull case in precious metal markets since October has been a weakening dollar which now appears to have recovered especially with the market's decision that despite signs of US slowing, the US will likely hold up better than most in the face of the lagged headwinds from the unprecedented rate hike cycle...[MORE]

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Predicting the reaction in gold and silver to today's US payroll report is difficult as the precious metal trade this week has periodically delinking with key outside market drivers in place over the prior two months.

Recently, the focus of gold and silver has shifted primarily to the dollar with US treasury rates a secondary and inconsistent influence.

Pushed into the market, we favor the bear track with the aggressive blowoff reversal and a follow-through slide in gold and silver prices this week threatening the bull camp...[MORE]

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In retrospect, gold and silver bulls should be disappointed/discouraged by the lack of bullish response to what has been a consistently falling implied US treasury yields but that support has been aggressively countered by residual signs of strength in the dollar.

Yesterday the laser focus on the prospect of a US rate cut early next year was lost again as cumulatively this week's jobs reports have signaled slowing.

Perhaps the trade is waiting for ultimate confirmation of slowing from the most important jobs report of the cycle, the nonfarm payroll report on Friday...[MORE]

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Gold prices rallied overnight as bulls took advantage of the lull in the dollar. Although interest rates were up marginally overnight the bull camp was spurred on by continued hopes of a rate cut.

Bulls will be watching this morning's ADP data for evidence of further weakness in the US economy that might warrant Fed dovishness.

The Perth Mint reported that gold sales jumped 26.52%, to 53,520oz this month, as the demand for physical bullion surged...[MORE]

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Volatility is likely to continue in gold and silver as the trade continues to waffle back and forth from the ebb and flow of potential central bank policy bias changes.

In fact, today's US scheduled data window will likely add or subtract to the first quarter rate cut assumption (generally held by the trade), but we give the edge to the dollar bears/gold bulls from the potential for a softening US economy take away through this morning's US reports.

We must note the lack of a flight to quality surge in gold overnight following Moody's downgrade of Chinese credit especially with a lack of gold buying following a noted uptick in Chinese credit default swap rates...[MORE]

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While the February gold contract exploded to all-time highs overnight the market recoiled aggressively and at times this morning gold was trading $79 off its high!

With the dollar showing early strength and US treasuries showing slightly higher yields, the gold and silver markets obviously received buying from something other than their recent focus.

It appears the markets garnered flight to quality buying from two separate issues related to military events. Flight to quality issues thought to be lifting precious metal prices overnight were the ballistic missile attack of two Israeli ships and Chinese accusations that the US Navy "seriously violated" their sovereignty after sailing into the South China Sea...[MORE]

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As goes the dollar, so goes gold in the opposite direction! In fact, with yesterday's dollar reversal and today's upside $ extension gold is facing a critical junction and perhaps a failure of key support following today's early US scheduled data.

However, the jury is out on the impact of today's PCE and initial claims readings, with soft PCE and higher initial claims data still capable of resurrecting the bull case in gold and silver.

Therefore, further evidence of a US Fed pivot early next year to lower rates has been heavily factored with the November low-to-high rally of $127 and it now needs fresh bullish fuel...[MORE]

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Despite gold being overbought, the bulls are still in the driver's seat with the Feds Waller yesterday giving dovish statements ahead of the Feds blackout period.

It should also be noted that several prominent fund/money managers have predicted US rate cuts in the first quarter of 2024 and that combined with a developing pattern of softer US data should leave the dollar in a downward track and in turn leave gold and silver in upward tracks.

Along those lines, today's scheduled data could present a temporary dip in gold if US GDP readings match expectations of a minimal improvement...[MORE]

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Clearly, the gold market has seen the bull camp revitalized by signs of a resumption of the dollar downtrend and has managed the rally despite evidence of a decline in Chinese October net mainland gold imports through Hong Kong.

Therefore, the gold trade continues to focus on dollar and interest rate action at the expense of classic internal supply and demand developments.

In fact, while the story should be regarded as "old" the trade continues to pound the drum on an on-hold global central bank theme...[MORE]

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