Written Commentary
GOLD
August gold futures advanced to near the $2376 per ounce level on Tuesday, recouping some losses from the prior session. Traders are now turning their attention to Federal Reserve Chair Powell’s 9:00 central time semi-annual testimony before the Senate Banking Committee. Powell will provide an overview of current economic conditions and give an update on the Federal Reserve’s outlook for the economy. In addition, Powell’s testimony will provide indications on the Fed’s interest rate path. On Wednesday Powell will testify before the House Financial Services Committee.
Investors are also looking forward to upcoming inflation reports to be released on Thursday and Friday. The June consumer price index and June producer price index reports are both expected to show 0.1% increases.
Financial futures markets are currently pricing in a 75% probability that the Federal Open Market Committee will lower its key interest rate in September, and a second-rate cut is likely by the end of the year.
Traders continue to monitor geopolitical developments in the Middle East.
The long-term fundamentals for gold are bullish on balance.
SILVER
September silver futures advanced to near the $31.44 per ounce level on Tuesday, recouping some losses from the prior session. Traders are looking ahead to Federal Reserve Chair Jerome Powell’s testimony before Congress today and tomorrow for clues on the timing of interest rate cuts. Investors are also awaited key inflation reports this week.
There are increasing expectations of stronger demand for silver in renewable energy expansion. The technical aspects are supportive now that futures broke out above a major downtrend line last week.
The fundamentals and technical aspects are improving, which suggests higher prices for silver futures.
COPPER
September copper futures advanced to just above the $4.65 per pound level today, recovering some losses from the previous day. Some of today’s gains can be linked to indications of improving physical demand from a top consumer in Asia.
Softening U.S. economic data increased probabilities that the Federal Reserve will lower interest rates, supporting the outlook for commodity prices.
September copper futures are looking better technically, now that futures on the daily chart advanced above a major downtrend line that started in mid-May.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
