Blog posts tagged with 'copper'

While gold and silver are tracking higher early today the charts still favor the bear camp from last week's sharp range-down failures which in turn should make the Thursday/Friday lows key pivot point pricing to start the new trading week.

Key pivot point pricing in June gold begins at $2328.10 and at $30.265 in July silver.

Adding to the negative track in gold and silver prices early today is news that Chinese April net gold imports plunged 38% from March which we think was largely the result of historically high pricing...[MORE]

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What goes up aggressively and makes a chain of new record highs holds the prospect of aggressive corrective action. In fact, if gold finishes the week at current levels, it will have dropped the most in a single week since last October!

In retrospect, the pendulum shift on US interest rate policy back toward the hawks, combined with a higher high in the dollar and a pulse higher in treasury yields, provides a bearish environment for gold and silver into the end of the week.

However, if recent gains were partially the result of flight to quality issues, we suspect some bargain-hunting buying will surface before the close today, but perhaps after additional declines...[MORE]

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While the declines yesterday in gold and silver were blamed on fear of hawkish statements from the last Fed meeting minutes, the declines this morning are the result of a realization of hawkish news from the actual release.

Apparently, the Fed had a debate on whether policy was tight enough to bring inflation down as quickly as was hoped for and some policymakers were disappointed in the economic information they have seen since the March meeting.

Therefore, a minimal higher high for the move in the US dollar adds to the liquidation bias in markets that were significantly overdone into the recent highs...[MORE]

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While today could be a very critical pivot point for gold from a macroeconomic perspective, (US Fed meeting minutes release, 20-year US treasury bond auction, and existing home sales) it should be noted that internal fundamentals remain generally positive.

In fact, gold ETF holdings have now risen for six straight days and silver ETF holdings yesterday jumped by a notable 2.8 million ounces.

In a minimal and perhaps temporary negative development, gold saw a forecast overnight from Commerzbank suggesting gold prices will fall back to $2300 in the second half of this year. Countervailing the bearish $2300 price projection by Commerzbank is a forecast from Morgan Stanley of a target of $2760 an ounce...[MORE]

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PG Comment: I wouldn't consider a retreat to $2300 bearish. That's just 4.6% below the current price. Now if we go the $2760 first...that's another story.

Volatility has expanded and is likely to stay elevated with gold and silver continuing to march to their own drummer.

The dollar and treasuries have held within a narrow range over the prior four trading sessions with a very minimal downtrend bias seen in both markets.

It should be noted that gold ETF holdings are beginning to rise consistently, with last week posting an inflow of 230,227 ounces, and with the addition of 135,000 ounces in just the last two sessions...[MORE]

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With an overnight explosion in prices, gold reached a new all-time high while silver posted explosive gains and the highest price since February 2013!

With the battle heating up in Gaza, a slight shift in the US Fed policy pendulum in favor of the doves last week, and a strong close last week on rising open interest should leave gold in a position to forge even higher all-time highs.

However, the silver market could become the sleeper market as a cheap gold substitute, especially with a surprise upside extension overnight, given silver is significantly cheaper than gold, and with silver still well below all-time high levels above $50 from decades ago...[MORE]

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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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