Written Commentary
SILVER
Pressure on precious metals last week was driven by the belief that the Federal Open Market Committee may be slower than previously anticipated to reduce its fed funds rate in 2025. However, on Monday futures advanced above a downtrend line and there was some upside momentum today.
Some of today’s gains in silver can be linked to the potential for a broader conflict in the Ukraine-Russia situation, leading to increased demand for safe-haven assets like silver.
GOLD
December gold futures are higher driven by heightened tensions in the Russia-Ukraine war, prompting traders to seek the safety of gold. Fears of a further escalation and potential involvement from other countries spurred demand for safe-haven assets, lifting gold and U.S. Treasuries, even as the U.S. dollar strengthened.
Yesterday December gold futures broke out above a major downtrend line.
COPPER
December copper futures remain in a 5-day congestion pattern after, nearing a more than two-month low on November 14, as renewed concerns over an escalation of the Ukraine-Russia conflict strengthened the U.S. dollar and weighed on commodities priced in the greenback.
At the same time, markets continued to assess the outlook for demand from China, the world’s top copper consumer, in light of uncertainty over the effectiveness of the country’s monetary and fiscal stimulus measures on its manufacturing sector.
On the supply side, abundant copper availability further pressured prices, as China has significantly boosted its copper refining capacity in recent years to meet growing demand linked to the metal’s role in electrification. However, weakening manufacturing and construction activity in China, along with concerns over potential trade barriers that could limit exports of surplus copper, added to the bearish outlook.
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