Written Commentary
COPPER
December copper futures are lower Tuesday and are under the 4.400 level, falling to a three-week low due to concerns that China’s stimulus measures may fall short in boosting economic growth in the world’s largest metals consumer.
Over the weekend, China’s Ministry of Finance revealed its fiscal stimulus plan, which includes support for the property sector, but failed to reassure the market as investors remain uncertain about the size of the package. In addition, September’s trade figures for China came in weaker than anticipated, which heightened concerns about demand. The lack of demand is evidenced by the extended period during which processing fees for Chinese copper smelters have remained near zero, suggesting an oversupply in the refined copper market.
GOLD
December gold futures advanced due to the bullish interest rate implications of the weak October Empire State manufacturing index, which came in at a negative 11.9 when 2.7 was expected. In addition, some of today’s support can be linked to indications of increasing tensions in the Middle East.
SILVER
December silver futures are higher and were able to trade a bit above the 31.50 level. Silver futures are experiencing heightened volatility as investors evaluated China’s weekend stimulus announcements and the outlook for U.S. interest rate cuts.
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