Written Commentary
GOLD
December gold futures are lower today, giving back some of yesterday’s gains that were linked to a flight to quality flow of funds.
There was additional pressure today when the September ADP employment change report was released, which showed an increase of 143,000 when up 121,500 was expected. This report, in theory, reduces some of the pressure on the Federal Reserve to more aggressively ease credit conditions.
SILVER
December silver futures are higher again today after yesterday’s flight to quality inspired gains.
Silver, along with other precious metals, have recently benefited from expectations of interest rate cuts by the Federal Reserve and other major central banks. The Federal Reserve’s 50 basis-point cut in September, along with potential further easing due to a weakening labor market and slowing inflation has supported precious metals.
In addition, demand for silver has increased after a large silver consuming country in Asia announced fiscal and monetary stimulus plans.
COPPER
After Monday’s one-day reversal to the downside on the daily chart, December copper futures are trading higher today but still substantially under the high of 4.790 that was hit on Monday.
Also, some of the gains can be attributed to large stimulus measures from a major copper consuming country in Asia that improved the economic and demand outlook for the world’s largest copper consumer.
Underlying support remains for copper due to prospects of further U.S. interest rate cuts, which could boost global economic activity.
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