Written Commentary
COPPER
The copper market looks to continue to post significant two-sided volatility as classic fundamentals are opposing and the significant setback of $0.50 from last week’s high should unnerve many would be buyers. In fact, Asian equity analyst are growing uncomfortable with the lack of favorable news flow on the US/Chinese trade negotiation process. However, copper prices should be underpinned by news that Chinese refined copper imports in June jumped by 15% especially with the implementation of the US 50% tariff on copper drawing closer. In other words, further buying to protect against a Chinese shortage due to a massive tariff on US purchases next month could continue before that demand source falls off a cliff in the coming weeks. From classic economics the copper market is likely to hit a kinked demand curve/gap.
Set of copper pipes of different diameter lying in one heap
GOLD
We see today’s US Federal Reserve meeting as a bearish influence on gold prices today unless the trade detects a slight increase in economic concern from Fed dialogue this afternoon. Unfortunately for gold, odds of a rate cut today are statistically insignificant and the best the bulls can hope for is a slight change in wording, raising the risks of slowing at the Fed. As indicated in dollar coverage this morning, the bias is up largely because the US economy is not showing signs of slowing “more than” another key economies. However, significant chart damage in the euro and pound looks to allow the dollar further “win by default” gains.
SILVER
Like gold, the silver market has seen a resumption of silver ETF holdings inflows and that is possibly helping cushion prices against further losses. In fact, recent silver ETF holdings reached the highest level since July 2022 suggesting investors are accumulating positions on weakness.
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