Written Commentary
GOLD
December gold futures are higher, although there appears to be no specific news since yesterday’s close that would account for today’s gains.
Traders are awaiting two key inflation reports that could influence Federal Reserve policy. The August consumer price index report will be released tomorrow and is expected to show a 0.2% increase, and the August producer price index report will be released on Thursday and is forecast to show a 0.2% gain.
Currently there is a 73% probability that the Federal Open Market Committee will lower its funds rate by 25 basis points at its September 18 meeting, and there is a 27% probability that the FOMC will reduce its key interest rate by 50 basis points in September.
Follow-through gains are likely for gold futures today.
SILVER
December silver futures are higher and appear to be performing better than the news would suggest. Prices are higher despite the decreasing probability that the Federal Open Market Committee will lower its fed funds rate by 50 basis points, and instead will probably opt for a 25 basis point reduction in its key interest rate on September 18.
Prospects of a U.S. recession and economic uncertainties in a large metals consuming country in Asia may limit price gains in the longer term.
However, follow-through price gains are likely for silver in today’s trade.
COPPER
December copper futures are lower but are holding above the 4.100 level.
The bearish influence of a weak demand outlook for the red metal will more than offset the bullish influence of the Federal Reserve that is expected to pivot to accommodation at the upcoming September 18 policy meeting.
Interested in more futures markets? Explore our Market Dashboards here.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
