Written Commentary
COPPER
Clearly, the copper market has not benefited from the improvement in global risk sentiment flowing from a lower dollar, lower US implied Treasury yields and perhaps most importantly from optimism flowing from global equity market gains. However, the copper market is likely to take significant direction from the release of Chinese new loans for September when and if they are released today. However, copper prices will be impacted by US and Chinese inflation data with US PPI scheduled for release early today and Chinese inflation data scheduled for Friday. Unfortunately for the bull camp prices have not benefited yet from fresh rumors of additional Chinese stimulus following talk that China will raise its 2023 budget deficit.
GOLD / SILVER
Gold and silver prices continue to rise as this week’s early financial market trends have extended into another session with higher equities, a weaker dollar, and most importantly sharp declines in implied US treasury yields. We mention strength in the equity markets as we have detected bullish sensitivity in gold and silver to positive economic developments recently as if a portion of
the trade is anticipating improved physical and investment demand from improved global economic sentiment. A minimally negative physical supply development is the settlement of a 120-day Mexican gold-mining strike at Newmont. In the end, the dominating force in financial markets this week is the perceived dovish shift in the US Fed because of surging long-term interest rates and the possible negative impact on the US economy from higher mortgage rates and higher borrowing costs for businesses.
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