Labor Day Shakedown. Manic Metals Report 09/05/2024

Industrial and precious metals are coming back from the Labor Day shakedown. No I am not talking about the latest mattress sale what I am talking about is the preponderance of three day holiday weekends to create a risk off environment which really hurt the metals across the board.

Make no mistake about it the negativity in the industrial metals came as industrial numbers from China in the United states were extremely weak.  At the same time when we head into an easing cycle the odds are the metals won’t go too far down. Concerns about a trade war have permeated the metals markets but it looks like we have seen a turnaround in the momentum today for gold and silver which could bode well from the industrial metals as well.

Still with the sell off and gold were not that far from the record high, and it says he had ridden before gold seems to be the perfect catch for almost any occasion.

These days gold futures have found favor on increased geopolitical risk and the possibility of a World War breaking out at some points not only do we have Russia and Ukraine going at it the rise of the Islamic based Hamas Hezbollah and the Houthi rebels continue to keep the world on the precipice of very serious global conflict.

Also of course can be a hedge against inflation and regardless of the fact that inflation is slowed it’s still continuing to rise taking away the purchasing power away from many Americans gold historically has been a hedge against that purchasing power loss and we’re seeing major players start to buy gold central banks of course went through a slew of record buying and it makes you wonder what global central banks know and what they don’t know.

The strength of the county is also running to be key and with an uptick in consumer confidence the odds at jewelry buying my increase this year over last year could be a good factor going into the holiday buying season.

In India buying of gold has pulled back when prices hit record highs but the subsequent drop in coal may bring the Indian buyer back into the jewelry trade.

Dow Jones reported Global gold exchange-traded funds saw inflows for the fourth consecutive month in August, with Western funds leading the way, according to a new report.

Gold exchange-traded funds added $2.1 billion dollars in August to bring global gold assets under management to a month-end peak of $257 billion, with all regions reporting positive inflows, according to a report from the World Gold Council. Continuous gold futures on the New York Mercantile Exchange rose 0.8% to $2,545.40 a troy ounce in European afternoon trading, nearing the record of $2,570.4 an ounce set on Aug. 20.

North American funds contributed the largest inflows, adding $1.4 billion in August for the second consecutive month of purchases. Cooling inflation readings and a wobbling labor market, alongside dovish messages from the Federal Reserve, all but guaranteed a September interest-rate cut, a boon for non-interest-bearing gold, the report said.