Written Commentary
GOLD
Gold futures were higher in the overnight trade but gave back most of the gains when the 7:30 central time U.S. economic reports were released. The data suggests the Federal Reserve may be less aggressive when it pivots to accommodation. Retail sales in July increased 1.0% when up 0.3% was expected. Jobless claims in the week ended August 10 were 227,000 when 234,000 were anticipated. The August Philadelphia Federal Reserve manufacturing index was negative 7.0 when 5.8 was forecast. Import prices in July were up 0.1% when a 0.1% decline was estimated, and export prices increased 0.7% when down 0.1% was expected. Industrial production in July was down 0.6% when a decline of 0.1% was forecast, and the capacity utilization rate was 77.8% when 78.6% was anticipated.
There is now a 75% probability that the Federal Open Market Committee will lower its funds rate by 25 basis points at its September 18 meeting, and there is a 25% probability that the FOMC will reduce its key rate by 50 basis points in September.
Gold continues to benefit from its safe-haven appeal.
SILVER
September silver futures are higher, and much of the strength could be technical in nature as prices now have moved above a major downtrend line that started in mid-July. Silver is putting in a strong performance today despite financial futures markets suggesting the Federal Reserve may be less aggressive in pivoting to accommodation in light of recent economic reports.
COPPER
September copper futures are higher today remaining above the psychological $4.00 per pound level as markets assess threats to supply, while gauging the magnitude of weak demand. It was just last week that prices fell to a five-month low of $3.921.
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