Written Commentary
COPPER
September copper futures are back under the $4.00 per pound level and are near the lowest level in five months. Futures have come under pressure recently on the belief that the global economy is slowing, limiting demand for industrial commodities. Demand for copper and base metals in general is expected to remain relatively weak, especially from a large metals consuming country in Asia.
GOLD
December gold futures advanced despite a second day of gains in the U.S. dollar. The on-balance bullish bias for the yellow metal is driven by expectations of multiple interest rate cuts from the Federal Reserve following weak economic reports, especially last Friday’s employment data.
Financial futures markets are now pricing in over 100 basis points of total easing in 2024. There is a 63% probability that the Federal Open Market Committee will lower its fed funds rate by 50 basis points at its September 18 meeting, and there is a 37% probability that the Fed will lower its rate by 25 basis points.
SILVER
September silver futures are lower as the bearish influence of anticipated reduced industrial demand more than offset the bullish flight to quality influence. Silver fell to three-month lows on Monday due to increasing growth concerns and the widespread sell-off in financial markets.
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