Written Commentary
COPPER
September copper futures are higher, advancing above the psychological $4.00 per pound level. Last week prices fell below $4.00, which was the lowest in five months. The dominant bearish fundamental is the increasing perception that the global economy is weakening. In addition, demand for base metals, including copper, is likely to be limited by a major copper consuming country in Asia.
SILVER
September silver futures advanced to just under the 28.10 per ounce level, halting the selloff that took prices to a three-month low last week. Much of last week’s weakness was linked to a pessimistic outlook for global manufacturing activity, which is limiting demand for industrial commodities.
Recent economic reports showed the U.S. economy added substantially fewer jobs in July than predicted, which caused traders to believe the Federal Reserve may be behind the curve and already may be too slow in averting an economic downturn.
GOLD
August gold futures are higher and are at the 2494 level on Monday as traders shift their focus to a series of potentially market-moving reports this week for direction on the Federal Reserve’s monetary policy path.
There are no major economic reports scheduled for today. However, there are important reports scheduled for later this week. On Tuesday the producer price index for July is expected to be up 0.2%, and on Wednesday the July consumer price index is predicted to advance 0.2%. Retail sales for July to be released on Thursday are forecast to show a 0.3% gain. Friday’s August consumer sentiment index is estimated to be 67.0.
Market opinions are now divided on the extent of a likely Federal Open Market Committee fed funds rate cut at its September meeting. There is now a 51% 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 49% probability that the FOMC will reduce its key rate by 50 basis points in September.
The yellow metal’s safe-haven appeal has been enhanced by escalating geopolitical tensions in the Middle East.
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.
