The Last Resort. Manic Metals Report 06/12/2024

Many years ago, when I first got into the commodity business, I had my share of what I used to think of as old codgers zapping up contracts of gold and silver because they believed that the end of the world was near, and gold and silver would be the currency of last resort.
Ok, maybe not the end of the world, but perhaps the tumbling of world governments or a nuclear confrontation with the Soviet Union.
Of course, I used to think that maybe they were crazy or at the very least the type of folks that wore tin-foil hats. Yet know that I happen to be an old conger myself, maybe they were not so crazy after all. And my tinfoil hat kind of covers up my bald spot.

Gold and silver are flying ahead of the Fed and bouncing after the CPI came in softer than expected as the core inflation rate hit a three-year low. Headline CPI increased by 3.3% year over year in May vs. 3.4% expected by economists. The index was flat month over month vs. 0.1% growth expected. Core CPI increased by 3.4% year-over-year vs. 3.5% expected in May. On a monthly basis, that index rose by 0.2% vs. 0.3% expected.
Metals popped after the report pretty much across the board as it is now expected that the Fed will be able to have some wiggle room when it comes to cutting interest rates especially ahead of the US election.
Yet CPI or no CPI, Gold buying by central banks along with inflation and geopolitical risk buying is higher that it’s been in some time and now disturbing movements by the Russians to send a not subtle message to the US has me trying to remember my nuclear drill that we did in grammar school.

War games by Russia in the Caribbean as Russian ships and a nuclear-powered submarine are off the cost in Cuba this week.  The Biden administration of course is don’t worry there is nothing to worry about and that the exercises aren’t considered a threat but just to be safe the Americans have deployed ships to shadow the Russians.

US Civil Defense News seemed worried as they reported that “: NORTHCOM and NORAD are on alert!! A fleet of four Russian warships are reportedly being “shadowed” by US and Canadian naval vessels off the coast of Florida in a potential standoff during Russian/Cuban wargames in the waters off the Florida Coast! Biggest direct standoff in North America since the Cuban Missile Crisis in 1962!!

They also reported that ;Three Russian warships and a nuclear submarine are in Cuba; the nuclear submarine Kazan, the frigate Gorshkov, the fleet oil tanker Pashin and the rescue ship Nikolai Chiker. Although Cuba has said that none of the vessels carries nuclear weapons, we can’t know for sure!
The fleet is conducting wargames off the US Coast in a show of force near the US!! US Navy has been monitoring and tracking the fleet since they arrived in the Northern Hemisphere!!
So, if I remember you open the windows for tornadoes in close them in case of the threat of nuclear attack. Or maybe it’s the other way either way I think you’re supposed to get below your desk.
Regardless with the soft CPI and the fact that the Fed more than likely is going to be able to be a bit dovish today the turnaround in metals both industrial and precious looks solid we may get a bit of a pullback before the Fed but try to take advantage of that and to buy the break.

Aluminum Futures have been getting crushed also turned .  Reuters reported that :The U.S. has added three more companies to a list that bars imports from firms allegedly involved with Uyghur forced labor in China, according to a U.S. government notice posted online on Tuesday. The latest targets include shoe manufacturer Dongguan Oasis Shoes Co, electrolytic aluminum maker Xinjiang Shenhuo Coal and Electricity Co and food processor Shandong Meijia Group Co, also known as Rizhao Meijia Group, the notice from the U.S. Department of Homeland Security (DHS) said.
“Through these actions, DHS is increasing its focus on seafood, aluminum, and shoes – sectors that play an important role in Xinjiang’s economy – and ensuring goods made with forced labor are kept out of the U.S. market,” the department said in a separate statement. M
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