Written Commentary
GOLD
December gold futures are higher, although there appears to be no specific news out since Friday’s close that would account for today’s gains.
Investors will be watching out for two key inflation reports that could influence Federal Reserve policy. The August consumer price index report will be released on Wednesday 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 75% 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 25% probability that the FOMC will reduce its key interest rate by 50 basis points in September.
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 most likely opt for a 25 basis point reduction in its key rate on September 18.
Federal Reserve Governor Christopher Waller and New York Federal Reserve Bank President John Williams indicated support for rate cuts to keep the job market stable.
Follow-through price gains are likely for silver in today’s trade.
COPPER
December copper futures are higher in spite of a sudden reversal in prospects of an aggressive pivot to accommodation from the Federal Open Market Committee. Also, copper futures are higher today despite indications of a weakening economy in light of Friday’s on-balance weaker than expected employment data.
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