Written Commentary
GOLD & SILVER
In retrospect, gold and silver bulls should be disappointed/discouraged with the lack of bullish response to what has been a consistently falling implied US treasury yields but that support has been aggressively countered by residual signs of strength in the dollar. Yesterday the laser focus on the prospect of a US rate cut early next year was lost again as cumulatively this week’s jobs reports have signaled slowing. Perhaps the trade is waiting for ultimate confirmation of slowing from the most important jobs report of the cycle, the nonfarm payroll report on Friday. Unfortunately for the bull camp, estimates call for a higher nonfarm payroll reading than in the prior month, but the current pattern is for softer “than expected” jobs results. In an indirect minimal supportive development, Chinese central bank gold reserves were 380,000 ounces above the prior month (the highest in 13 months) and the Turkish central bank continues to show interest in the gold trade with the opening of a three-month gold swap auction of 410 tons of gold. In conclusion, the failure to launch on the upside yesterday following the breakout down in US treasury yields yesterday and ongoing sell modes in short-term technical indicators leaves the bear camp with an edge.
COPPER
The copper trade has a minimal improved vibe today with the trade holding above the spike down low yesterday in the face of disappointing overall Chinese trade data and not embracing an 8.4% rise in Chinese imports of copper concentrates and copper ores compared to last year. Copper imports were a bright spot in an unusually weak Chinese import report. At the same time, China’s exports did beat estimates some measures on the back of copper intensive EV exports. The bullish overnight price action could be partially from a minimal drop in the dollar and the prospect of further declines in US implied treasury yields today.
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