Written Commentary
GOLD
December gold futures declined in response to continued strength in the U.S. dollar, which has advanced to its highest level since December of 2022. Some of today’s strength in the greenback can be linked to the release of the October U.S. producer price index report. The producer price index increased 0.2% when up 0.2% was expected, and on an annualized basis increased 2.4% when a gain of 2.3% was anticipated. December gold futures declined to just above the $2540 level on Thursday, marking its fifth consecutive decline and reaching an eight-week low.
SILVER
December silver futures declined to the lowest level since September 12 and are now trading under $30 per ounce, as a stronger U.S. dollar and a rising risk appetite redirected investor attention away from precious metals. Some of the pressure can be linked to gains in the U.S. dollar since Donald Trump’s election victory last week, with markets anticipating increasing economic growth under the incoming administration.
In China, investor sentiment remained lukewarm after the government unveiled new measures to support the economy, including tax incentives for home and land transactions. Silver, which is a critical material in solar panel production, has been under pressure due to concerns over the lack of aggressive stimulus in China, which has tempered the outlook for the industry.
COPPER
December copper futures are lower but are holding just above the $4.00 per pound level on Thursday, marking a three-month low as ongoing concerns over demand and a strengthening U.S. dollar continued to put pressure on commodity markets.
Investors were not impressed by Beijing’s latest efforts to stabilize its economy, including new tax incentives for home and land transactions unveiled by the finance ministry on Wednesday. Adding to the uncertainty are fears that the incoming Trump administration may impose further tariffs on China, which have increased concerns about future copper demand.
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