Commodities: Silver
Precious metals didn’t follow the script overnight; bonds enjoyed a safety bid, but gold and silver were sold off as the “weak longs” grabbed profits following the stellar advances over the last 18 months. At one stage, gold fell over $US120 below its intraday high, while silver closed down by more than 6%.
Silver surged over 6% on Friday night, taking it to fresh decade highs – note not all-time highs like gold. The risk/reward looks attractive, with silver potentially poised for explosive gains in the months ahead. Buying new highs goes against the grain for many investors/traders, but by definition, new breakout moves must start with new highs.
US equities have been consolidating their strong ~10% bounce from August lows over the last eight sessions. With markets about to enter the often tough September ahead of the uncertainties created by the November election, which Sportsbet has as a coin toss, we have tempered our market view to neutral, but we stress this is not a sell.
US equities were again quiet overnight, with most indices managing to eke out small gains. Bond yields edged lower but not enough to dispel jitters ahead of Friday as the market continues to walk along the gymnast’s bar: Too strong, we won’t get rate cuts, and too weak, we could see increased concerns that the economy will slip into a recession—the fun job of Jerome Powell and all at the Fed.
Copper exploded higher last week, but even after the substantial gains, we remain bullish moving forward. Friday’s +3.6% advance saw copper ETFs up ~4.7%, illustrating many investors aren’t expecting the industrial metal to extend its recent gains. Analysts are generally behind the curve when it comes to commodity prices, and we believe there’s never been a better example than copper today, with many forecasts closer to $4 than $5, let alone the $6 that may be on the horizon, i.e. MM believes upgrades are inevitable.
