Phil Flynn
Phil Flynn is writer of The Energy Report, a daily market commentary discussing oil, the Middle East, American government, economics, and their effects on the world's energies markets, as well as other commodity markets. Contact Mr. Flynn at (888) 264-5665
Hedge-0-Matic. Manic Metals Report 08/19/2024
Gold is the ultimate Hedge -O Matic. It slices it dice, it’s the perfect hedge for almost every situation! Gold rocketed to new all-time highs and now the US dollar makes a low for the year. Slowing leading economic indicators and the geopolitical risk factors drive gold and $3000 an ounce, once thought to be a pipe dream, looks like a real possibility. The bond market is soaring as the rate cut looks like a done deal and central bank buying gold continues to be supportive.
Kitco News Reported that Broker SP Angel said today in a dispatch that gold prices started to climb Friday afternoon on reports China’s central bank has given new gold- import quotas to Chinese banks, “triggering speculation of a renewed wave of buying.” Chinese 10-year yields fell to record lows last week, with institutions rushing to buy over concerns of growth slowdown and deflation. “As a result, Chinese buyers are seeking alternative safe-haven protection, with gold an obvious candidate,” said the broker according to Kitco.
Copper though had a decent up day. And it too has been moving on Chinese demand concerns but is now focused on US interest rate cuts. The Investor’s Business Daily (IBD) reported that “Chatter increased on Monday regarding possible economic stimulus measures from China’s government. Expectations of big stimulus measures out of Beijing have produced a string of disappointments since early 2023. But Chinese economic data has turned so weak that this time will likely be different, according to a leading skeptic of China’s economic stewardship. The copper price, copper miners Teck Resources and Freeport-McMoRan, and Chinese e-commerce giant Alibaba continued their latest rally bids in Monday morning stock market action.”
We also believe that copper is undervalued and if the Fed starts cutting rates and China stimulates, go long copper. Palladium Futures though saw weakness while platinum was trying to stay in line with gold as the gold platinum spread continues to shine bright.
Silver also looks like a reverse. We may see some long silver spreading as traders look to lock in record high gold prices.
Make sure you stay tuned to the Fox business Network. Call me for your metals trading needs by calling 888-264-5665 or email me at pflynn@pricegroup.com
Thanks,
Phil Flynn
Senior Market Analyst & Author of The Energy Report and Manic Metals Report
Contributor to FOX Business Network
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