Written Commentary
GOLD & SILVER
Clearly, gold, and silver prices lost upside momentum in the wake of a very active US economic report slate this week has presented a mixed outlook for the US economy and surprisingly that failed to markedly increase expectations for a US June rate cut. Certainly, the markets have been disappointed by US Fed dialogue seemingly playing down and or pushing back the prospect of rate cuts. However, the gold and silver trade will likely remain sensitive and perhaps poised to rally if today’s key nonfarm payroll reading is softer and the Takeaway from US data shifts sentiment toward economic risk. Fortunately for the bull camp, and silver ETF holdings have posted two straight days of inflows with silver inflows showing relatively larger inflows. Unfortunately for the bull camp, precious metal markets have failed to benefit from a serious escalation in Middle East tensions this week following Israeli attacks of Iranian outposts in Syria and from rumors that Iran intends to retaliate against Israel quickly. In a very minimal negative, Perth Mint gold sales fell by two thirds in March in a sign that some demand destruction is taking place from record pricing. In today’s action, short-term macroeconomic influences are likely to drive the dollar, interest rates and ultimately gold prices.
COPPER
From a short-term trading perspective, this week’s extension of last week’s rally saw upside momentum accelerate, open interest continue to rise, and trading volume pick up. Therefore, expectations of improvement in the Chinese economy have been embraced by the trade and it is possible the Chinese attempt to reduce excess smelter capacity is cleaning up supply of refined products which could result in improved treatment charges. Because of a Chinese holiday, Shanghai copper warehouse stocks are not available today with the last update showing an increase of 1621 tons. In another modestly bearish internal development daily LME copper warehouse stocks increased by 3000 tons this morning.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
