Written Commentary
GOLD
December gold futures are higher and are above the psychological 2500 level. The metal continues to benefit from its status as a safe-haven asset in light of increasing tensions in the Middle East. Futures are holding up well despite recent strong U.S. economic data, which reinforced the case for a less aggressive monetary policy by the Federal Reserve in its widely anticipated interest rate cut in September. However, the Federal Open Market Committee still appears to be on track to lower its fed funds rate at its September 18 policy meeting by 25 basis points.
The main trend for gold is higher.
SILVER
Yesterday September silver futures advanced above a major downtrend line that started in mid-July. However, some of those gains are being given back today. Underlying support remains due to expectations that the Federal Reserve will pivot to accommodation in September. Data released this week showed that both producer and consumer prices in the U.S. were relatively tame in July.
Prospects of a weakening global economy are feared to limit demand for silver.
COPPER
September copper futures trended higher over the past two weeks due to supply disruptions. However, prices are lower today on news that a labor dispute at the world’s largest copper mine in Chile, which threatened to disrupt more than 5.0% of global supply, has been settled.
There was additional pressure today on news that housing starts in the U.S. in July were 1.238 million when 1.342 million were expected on an annualized basis, and annualized building permits were 1.396 million when 1.430 million were anticipated.
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