Written Commentary
GOLD
After advancing to new record highs yesterday, December gold futures were lower in the overnight trade. However, there has been a recovery in light of the weaker than expected U.S. August personal income report, which puts pressure on the Federal Reserve to be more accommodative.
The increasing risks of a broader conflict in the Middle East continue to enhance gold’s status as a safe haven.
SILVER
Yesterday December silver futures advanced to the highest level since May 30 and were able to trade above the $33 per ounce level. Most of the recent gains can be attributed to the Federal Open Market Committee’s 50 basis point reduction in its fed funds rate last Wednesday and anticipated future interest rate cuts from the Federal Reserve.
In addition, some of the gains are due to recently announced economic stimulus measures from a large silver consuming country in Asia.
A weaker U.S. dollar index Is contributing to recent strength in silver prices.
COPPER
December copper futures were higher in the overnight trade, hitting the highest level since June 7 and are on track to advance approximately 7.0% on the week. Much of the recent strength can be attributed to a variety of economic stimulus measures from a large copper consuming country in Asia.
In addition, the Federal Reserve’s pivot to accommodation has contributed to price gains for industrial commodities, including copper.
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