Written Commentary
GOLD
December gold futures are higher in a flight to safety move in light of increasing geopolitical risks in the Middle East. Some of the pressure on prices yesterday was linked to comments from Federal Reserve Chair Jerome Powell when he indicated traders should not expect follow-on interest rate reductions of 50 basis points at upcoming meetings. Powell suggested any additional interest rate cuts are likely to be in smaller increments of 25 basis points.
SILVER
After two days of declines, December silver futures are higher today. Some of the pressure yesterday was linked to Fed Chair Powell’s comments, which dampened hopes of another 50 basis-point cut in its fed funds rate at the November policy meeting.
Some of today’s gains are linked to flight to quality buying in light of increased geopolitical tensions in the Middle East.
In addition, some of the recent strength is due to last week’s economic stimulus measures from a large silver consuming country in Asia.
COPPER
December copper futures are higher today. However, yesterday on the daily chart a one-day reversal pattern to the downside was formed, suggesting a near term top may have been made as traders took profits following three straight weeks of gains.
Recent strength was also linked to the September 18 Federal Open Market Committee’s 50 basis-point reduction in its fed funds rate. Also, some of the gains can be attributed to large stimulus measures from a major copper consuming country in Asia that improved the economic and demand outlook for the world’s largest copper consumer.
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