China Party. Manic Metals Report 09/27/2024

The global metals markets had been feasting on the Chinese stimulus package that caused the Chinese stock market to hit to their best week since 2008 as Asian stocks hit 2 1/2 year high. We are seeing that huge rebound not only in copper but aluminum as well.
Aluminum had been lagging the market in this pop in aluminum seems to suggest that perhaps the movement that we’re seeing in Chinese stocks could filter down to other commodities.
A aluminum prices have been languishing as the Chines economy suffered. Now with China trying to juice the economy and by doing whatever it takes the rebound in aluminum may be more telling than the massive recovery that we have seen in copper.
Aluminum should get support from China’s green initiatives as they push EVs, renewables, and associated power transmission technology. While copper is going to be critical to the demand for power to feed data centers and artificial intelligence. aluminum also will have a place in that story.
The US durable goods story also helped industrial metals. Not only did the numbers come out better than expected it showed that inflation was kept in check.   MarketWatch reported that orders for U.S. durable goods were flat in August, the Commerce Department said Thursday.
The result was much better than anticipated. Economists had forecast a 3% fall in orders for durable goods — products made to last at least three years. Durable goods orders rose a revised 9.9% in July, up slightly from the prior estimate of a 9.8% gain.  Core capital goods orders, which exclude volatile sectors like transportation and defense, rose 0.2% last month after a 0.2% drop in July. Shipments of core goods, which are factored into GDP, rose 0.1% in August.
So, in short. It was a Goldilocks number for bulls on industrial metals.
Long term gold bull Peter Schiff is having his day as his predictions of record-breaking gold prices, that would outperform stocks, and crypto currencies are now starting to come true, Now Schiff is now predicting a return to the metals bullish policy of quantitative easing.
Schiff said ““There’s no doubt in my mind that we’re going to have quantitative easing probably at the latest by the first quarter of 2025. The Fed may even start after the election, depending on how bad things are. But the rate cuts were just the beginning. Powell and the guys at the Fed are saying, ‘Well, the economy is great. Everything is awesome, but we’re cutting rates by 50 basis points anyway–’ something that they rarely do.”
Reuters reported that “Major banks expect gold to extend its record-breaking price rally into 2025 because of a revival in large inflows to exchange-traded funds (ETFs) and expectations of additional interest rate cuts from prominent central banks around the world, including the U.S. Federal Reserve.
“Strong physical demand from China and central banks supported gold prices over the past two years, but investor flow, and retail-focused ETF builds in particular, continue to hold the key to a further sustained rally over the upcoming Fed cutting cycle,” analysts at J.P. Morgan said in a note on Monday.”
We believe what the Fed interest rate cuts in the Chinese stimulus is that the markets still have a long way to go silver is pulling back a bit today and is probably due for a technical correction we think that tip could be a great buying opportunity at least for options
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