Written Commentary
PRECIOUS METALS
Gold: December gold contracts continued to sell off, as a stronger dollar and modestly higher Treasury yields weighed on the metal, while the longer-term outlook remains challenging. The recent rise in oil over the last few sessions has heightened inflation concerns, leading broad sentiment to infer that most global central banks will not be able to ease policy in over the next year. The market remains strong in its expectations that the Fed will hold on rates next week but move policy higher by 25 bps in December. PCE inflation data, the Fed’s preferred inflation gauge, next week will strongly impact expectations around further policy. In the short-term, gold is likely to remain stuck in its consolidation. Recent survey evidence has continued to support the idea that economic growth remains robust, which gives ample reason to expect yields will move modestly higher over the next couple of months following their rapid rise recently.
Silver: December contracts are down 2.40% to $53.680.
BASE METALS
Copper: Copper prices rebounded across the globe as tech shares stabilized. LME copper gained 1.3% to $14,265, while US prices rose 1.26% to $6.4250. With the Nasdaq moving higher, investors are getting back into copper, reflecting a broader increase in risk appetite that is supporting the currency against the rise in warehouse inventory over the past week. LME copper stocks have risen 20% over the past week to 273,750 tons. However, inventories in SHFE warehouses have fallen nearly 27%, weekly data showed on Friday. COMEX copper is trading at a discount to LME copper, encouraging flows to the LME. In China, the Yangshan copper premium rose to $148 a ton on Wednesday, its highest reading in five years. Data-center investment, the energy transition, mine-supply challenges, and US stockpiling ahead of potential tariffs continue to underpin prices. Recently, uncertainty about whether US levies will actually be imposed has contributed to the recent range-bound trading. However, the potential tariffs present a key risk to prices if Democrats win big in midterm elections. Prices could fall steeply as a result of the Trump administration reconsidering tariffs in the event of a strong Democratic victory. On the other hand, prices could rise further if the administration announces tariffs. However, the reluctance from the administration to impose tariffs reflects the US’s inability to produce copper and existing concerns over cost-of-living pressures at home.
Zinc: Zinc gained 1.4% to $3,724.
Aluminum: Aluminum dipped 0.3% to $3,017.
Tin: Tin rose 0.8% to $50,500.
Lead: Lead added 0.5% to $1,907.
Nickel: Nickel 1.4% to $15,890.
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.
