Written Commentary
GOLD
December gold futures advanced to a new record high today, breaking out of a five-day congestion pattern, as traders continue to assess monetary policy decisions from major central banks. In addition, there is support for safe-haven assets in light of increasing geopolitical risks.
The Federal Open Market Committee implemented its first interest rate reduction since early 2020 on Wednesday with a 50-basis point reduction in its fed funds rate. Federal Reserve officials also projected the benchmark interest rate would decline by another 50 basis points by the end of this year.
SILVER
December silver futures advanced to the highest level since July 17, following Wednesday’s pivot to accommodation from the Federal Open Market Committee. Other major central banks are likely to lower interest rates before the end of the year as well.
Recent weakness in the U.S. dollar has contributed to speculative buying in silver.
COPPER
December copper futures are higher and are now trading at the highest level since July 18 after the U.S. Federal Reserve kicked off its easing campaign with a 50 basis-point interest rate cut and signaled further rate reductions, with two quarter-point cuts seen for the remainder of the year.
Futures have also been supported by reports of energy shortages in Zambia, which reduced output from one of the world’s main copper ore producers. In addition, recent weakness in the U.S. dollar has contributed to higher prices for copper futures.
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