Written Commentary
SILVER
July silver futures are higher Friday and are being supported by today’s stronger than anticipated US employment numbers, suggesting industrial demand will hold up. Today’s economic numbers paint a different picture on the outlook for the US economy compared to yesterday’s weak gross domestic product report.
Despite recent pressure, silver prices remain elevated this year and are supported by prospects of a more accommodative Federal Open Market Committee.
GOLD
June gold futures are higher on Friday despite easing trade tensions, which in theory reduce demand for safe-haven assets. Market sentiment improved after China indicated it may reopen trade talks with the US, fueling hopes of a thaw in relations. This came after President Donald Trump expressed optimism about reaching trade agreements with India, Japan and South Korea, and said there was a “very good chance” of striking a deal with China. Earlier in the week, President Donald Trump also signed an executive order scaling back some tariffs on automobiles and auto parts.
The Federal Open Market Committee will probably keep its fed funds rate unchanged at 4.25% – 4.50% at its May 7 policy meeting. However, the FOMC is likely to lower its fed funds rate by 25 basis points four times this year with the first reduction potentially coming at the June 18 policy meeting.
Anticipated interest rate cuts from the Federal Reserve later this year remain an underlying long term dominating supportive influence.
COPPER
July copper futures are higher on Friday, recouping some losses from earlier in the week in light of signs of improving US-China trade relations. Earlier this week, President Donald Trump hinted at potential trade agreements with India, Japan and South Korea, while expressing confidence in reaching a deal with China. Signs of progress in trade negotiations that lessens the risk of a global economic slowdown improved market sentiment.
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