Written Commentary
GOLD / SILVER
While the dollar index overnight did not show a definitive downside extension, the charts and Fed news favors the bear camp in the Dollar which in turn favors the bull camps in both gold and silver. Apparently, the meeting minutes from the September Fed meeting produced concern among Fed members with the threat against growth rising and perhaps paralleling the risk of inflation. From a short-term technical perspective, the gold and silver trade are slightly overbought but seeing gold, gap higher, pause and then extend this week is a bullish intermediate technical signal. While it appears that the focus of the financial markets is fixated on Fed policy, US initial claims data will also be released today with last week’s claims readings near the lowest of this year. Therefore, additional verification of a strong US jobs market could spark some hawkish dialogue from the Fed, but more likely any temporary hawkish market sentiment might only be capable of causing a minimal temporary setback.
COPPER
Yesterday the copper market waffled within this week’s preestablished trading range and has extended that waffling overnight in a sign that the trade continues to wait for fresh Chinese economic information. Obviously, the copper market is restricted on the upside by this week’s inflows to LME copper warehouse stocks which have topped 11,000 tons. However, the copper market has been unable to benefit from the market shift to a dovish Fed perhaps because a scheduled Chinese new loan report for September was not released as expected. However, copper should be supported from rumors earlier this week that the Chinese government might expand their 2023 deficit as that led to market talk of additional Chinese stimulus.
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