China’s Golden Pause. Manic Metals Report 07/08/2024

Precious metals or giving up some of their fantastic gains from last week partly because China decided to pause its spine for the central banks for the second month in a row. Traders remember all too well about the over $100.00 an ounce drop the gold saw after China pause its purchases last month. Now there are
concerns are that somehow China is going to remain out of the market for many months to come.
Yet signs that the dollar is topping after last week’s less than spectacular jobs report and the fact that some of the recent job creation is smoke and mirrors.
Fox Business reported that while the June jobs report revealed higher than expected job growth, with 206,000 new jobs created.  A third of those jobs were in the government sector.
Government employment rose by 70,000, which is far higher than the average of 49,000 over the last year.  Government employment was boosted by local government, excluding education and state government. The healthcare sector added 49,000 positions, lifted by increased hiring in ambulatory healthcare services and at hospitals. Construction payrolls increased by 27,000 jobs. But the retail sector shed jobs, as did manufacturing.
Professional and business services employment declined by 17,000 jobs, with temporary help jobs dropping by about 49,000. That likely portends slower payroll gains ahead.
Economists say the economy needs to create at least 150,000 jobs per month to keep up with growth in the working-age population, accounting for the recent surge in immigration. In a good sign for the Federal Reserve and its battle against inflation, unemployment increased from 4% to 4.1%, and wage growth slowed to a rate not seen since 2021.
This data should create a very friendly environment for precious metals going forward that is one of the reasons why the correction after the China news isn’t nearly as big. Perhaps a good time to start looking at putting on bullish strategies for both silver and gold.
Copper is on verge of a major breakout effort after its recent massive correction. Copper hit a three-week high.
Strength in Indian’s economy and the expectation that China will stimulate their economy should keep the copper market on solid ground. On Friday we hit key resistance and if we can break above that area, we should be able to move sharply higher be on guard for a bit of a correction but look to buy the break.
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