Written Commentary
GOLD
December gold futures surged above the 2800 level per ounce on Wednesday, marking a new record as investors absorbed recent labor data and assessed geopolitical risks in light of the upcoming U.S. elections.
Overall, lower interest rates are bullish for gold prices, as easier credit conditions reduce the opportunity cost of holding non-interest bearing bullion.
SILVER
December silver futures declined to under $34.00 per ounce on Wednesday, but are still close to a 12-year high, as uncertainty surrounding the upcoming U.S. presidential election and the Federal Reserve’s policy direction increased demand for safe-haven assets.
Despite bearish pressures from a rallying U.S. dollar and increasing U.S. Treasury yields, silver futures have shown resilience as traders focus on the upcoming National People’s Congress meeting and the possibility of new stimulus announcements from China.
COPPER
December copper futures stabilized around $4.34 per pound on Wednesday, remaining in a sideways range since the middle of October. This stability is supported by hopes that China, the world’s largest consumer of copper, will introduce additional stimulus measures during its upcoming leadership meeting next week.
On the bearish side is the strong U.S. dollar and rising U.S. Treasury yields, which have put pressure on commodities. In addition, the likelihood of a less accommodative Federal Reserve has limited the potential for price increases in industrial metals.
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