Written Commentary
GOLD
December gold futures came under pressure due to the slightly bearish on balance August consumer price index report. The August consumer price index increase 0.2% as expected, and on an annualized basis it was up 2.5% when an increase of 2.6% was anticipated.
The consumer price index excluding food and energy on a month-to-month basis was up 0.3% when a gain of 0.2% was forecast and on a year-to-year basis the consumer price index excluding food and energy increased 3.2%, which was as expected.
The consumer price index report suggests the Federal Reserve may be slightly less inclined to pivot aggressively to monetary accommodation policies.
SILVER
December silver futures advanced above a steep downtrend line in the overnight trade. However, more recently futures have given back much of those gains and are now under that trendline breakout point. Some of the pressure after highs were made may be linked to decreasing probabilities of an aggressive Federal Reserve pivot to accommodation.
Price gains for silver are likely to be limited due to increasing prospects of a U.S. recession and economic uncertainties in a major industrial metals consuming country in Asia.
COPPER
December copper futures are higher but remain in a six day congestion pattern. Some of today’s gains may be linked to reports that Shanghai Futures Exchange warehouses saw diminishing copper inventories recently, offering a glimmer of hope that physical demand may be recovering.
Prospects of easier credit from the Federal Reserve will probably only marginally support copper prices over the near term.
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