Written Commentary
COPPER
Copper futures extended their downturn in the overnight trade falling to near the $4.43 level, which is the lowest level since April 23, fully erasing May’s rally that took prices to a record high of near $5.20. There is evidence of lower demand in the near term. There is some recovery today and speculators are starting to think that the down move is overdone.
Speculative underlying buying interest remains in light of potentiality looming supply shortages due to copper’s role in electrification through grid-scale energy and data-center infrastructure.
There is major long-term support for July copper futures on the daily chart at the $4.40 area.
SILVER
July silver prices fell to $29.22 on Friday, retreating further from the 11-year high that was registered last month. Some of last week’s selling pressure was linked to the U.S. economy that is holding up relatively well, suggesting the Federal Reserve may be slower to pivot to accommodation.
The longer term supply and demand situation remains supportive, since silver is headed into its fourth consecutive year of deficit in light of tightening supplies.
Major support for July silver on the daily chart comes in at $29.00.
GOLD
August gold futures held above $2,300 per ounce on Monday, following a sharp decline last week. Much of the recent selling was linked to the belief that the Federal Open Market Committee may wait until it’s November policy meeting to lower its key interest rate. The likelihood of a rate cut in September has decreased to approximately 49%, which is down from 68% early last week, and there is a 63% probability that the FOMC will cut its key rate at its November 7 meeting.
Adding to the bearish sentiment was last week’s news that a large Asian central bank paused gold purchases in May after an 18-month streak of consecutive buying. Investors are now looking forward to the Fed’s interest rate decision and key U.S. inflation data due on Wednesday.
The main trend for gold is higher.
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