Written Commentary
PRECIOUS METALS
Gold & Silver:
Unfortunately for the bull camps in gold and silver macroeconomic/geopolitical issues continue to hang on the markets with crude oil prices this morning up $2.44 to nearly $104 in the US and above $107 in the Brent crude oil market. With Saudi Aramco unclear as to when they will reopen their East/West pipeline, traders can probably expect ongoing pressure on gold and silver from the oil market. On the other hand, oil market chatter overnight included the typical wild price projections ($150 per barrel) associated with overzealous speculative sentiment and that could result in a blow off top in oil and a spike down was in precious metals later this week! Furthermore, the trade was presented with residually hot CPI readings throughout Europe, and the CME Fed watch tool this morning pegs the probability of a US interest rate hike tomorrow at 93%.
BASE METALS
Copper:
With a new low-for-the-move overnight, pressure from deteriorating macroeconomic psychology and news of fresh deliveries against the LME copper contract, the bear camp retains firm control of the copper market today. In fact, a fresh bearish fundamental development was seen in the London futures market where the three month copper contract flipped from backwardation into contango which signals a market (at least temporarily) less concerned about type supply. In fact, LME copper warehouse stocks posted an unusual inflow yesterday of 6,325 tons, bringing the exchange supplies up to 249,225 tons. Chinese demand concerns could also be seen from a weaker than expected Chinese retail sales reading for August but news that was partially offset by a stronger than expected Chinese industrial production results.
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