Written Commentary
Precious Metals
Gold: Gold prices are over 2% higher, as a softer dollar and expectations over a December rate cut from the Fed lifted prices, despite hawkish comments from policymakers. Fed Funds futures imply a 64.6% chance of a rate cut from the Fed, down slightly from a week ago. Recent data showed US consumer sentiment fell sharply in November to its second-lowest reading on record, reflecting mounting concerns over the government shutdown. Meanwhile, private data has been mixed with the ISM Services PMI survey and ADP private payrolls data for October, posting better-than-expected results. However, the PMI data continued to show persistent inflationary pressures, with its prices index hitting a three-year high. Data from Challenger, Gray, and Christmas showed companies cut more than 150,000 jobs in October, the most for the month since 2003.
The US Senate on Sunday night advanced a measure to reopen the government and end the 40-day shutdown. If the Senate officially passes the measure, it will still need to be approved by the House of Representatives and sent to President Trump, a process that could take several days. Continued central bank purchasing of gold will continue to provide underlying support to prices.
Silver: Silver surged 3% to $49.745, reaching its highest level since October 20.
Platinum: Platinum rose 2.5% to $1,587.
Base Metals
Copper: Copper prices are higher, lifted by hopes that the US government shutdown will end soon, sparking a risk-on rally in global equity markets that also lifted industrial metals prices. Benchmark three-month copper on the LME gained 0.9% to $10,815. Also lifting prices is data out of China that showed easing producer price deflation and a rise in consumer prices; however, some analysts have warned that deflationary pressures may not be over. The producer price index fell 2.1% in October from a year earlier, per data from the National Bureau of Statistics. Forecasts expected a 2.2% decline in prices. The index has remained negative since October 2022 and dropped 2.3% in September. NBS statistician Dong Lijuan said capacity management in key industries has narrowed year-on-year producer price declines. Meanwhile, consumer prices edged up 0.2% from a year earlier, reversing a two-month decline and beating the estimate for no change. The figures indicate the government efforts to reign in excessive competition have helped stabilize prices to a degree, however, weak consumer demand remains a worry.
Zinc: Zinc gained 1.5% to $3,101.
Aluminum: Aluminum advanced 1.2% to $2,882.50.
Tin: Tin was up 1% at $36,195.
Lead: Lead rose 0.7% to a four-month high of $2,061.50.
Nickel: Nickel added 0.3% to $15,105.
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