Last week can be said to be a week of recession expectations. Many indicators reflecting economic fundamentals, such as U.S. CPI, retail sales, initial jobless claims, Wal-Mart's financial report, etc., performed well. In particular, retail sales greatly exceeded expectations, which made the market's worries about the U.S. recession temporarily slowed down.
The previous decline was affected by the double impact of recession trade and carry trade reversal. At present, both transactions have been reversed or falsified, so the price rebound repair is completely reasonable.
CORE POINTS
1. Both gold and copper prices rebounded last week
In terms of precious metals, COMEX gold rose 3.06% and silver rose 5.61% last week; The Shanghai Gold 2410 contract rebounded 1.26%, and the Shanghai Silver 2412 contract rebounded 2.92%. Among the prices of major industrial metals, COMEX copper and Shanghai copper changed by +4.18% and +3.15% respectively.
3. Gold prices hit record highs again
The released values of CPI and PPI in the United States were slightly lower than market expectations, but the retail sales data and the number of initial jobless claims released on Thursday night performed well, which made the market gradually falsify the previous expectation of recession in the United States, and the potential liquidity crisis also stalled due to the dovish performance of the Bank of Japan.
As a result, the price of gold rose strongly and hit a record high on Friday. Looking back, recession trading has reversed, and precious metal prices are still supported despite expectations of interest rate cuts and geopolitical conflicts, but the upward trend will not be so smooth. Pay attention to Powell's statement at this week's Jackson Hole annual meeting.
COMEX and Shanghai Copper Market Observation
Last week, COMEX copper prices fluctuated and rebounded. Last week can be said to be a week of further repair of recession trading. Many indicators reflecting economic fundamentals, such as U.S. CPI, retail sales, initial jobless claims, Wal-Mart's financial report, etc., performed well, especially retail sales exceeded expectations, which temporarily slowed down the market's worries about the U.S. recession. The previous decline was affected by the double impact of recession transactions and carry transactions. At present, both transactions have been reversed or falsified, so the price rebound repair is completely reasonable.
In terms of term structure, the COMEX copper price curve angle has previously shifted upward, and the price curve still maintains a contango structure. COMEX copper inventories continued to accumulate last week, and have now increased by a total of 15,000 tons to around 25,000 tons. According to market news, there will be delivery positions in the future, and it is expected that the spread structure will still maintain the Contango structure.
The SHFE copper price curve has shifted upward compared with before. The price curve maintains a contango structure, but has begun to converge. After the recent decline, consumption has improved significantly. In August, it seems that the destocking situation is very good, and there is reason to believe that it will last until October. Therefore, we believe that if we go further, there can still be a certain market to look forward to in the follow-up monthly difference.
In terms of positions, from the perspective of CFTC positions, the proportion of non-commercial long positions continued to fall from a high level last week. You can pay attention to whether subsequent non-commercial positions will turn into net short positions.
Figure 1: CFTC fund net positions
2. Precious metals market review
1. Precious metals market observation
COMEX precious metal prices rebounded strongly last week, with COMEX gold and silver running within the range of US $2,463-2,548/oz and US $27.2-29.1/oz. The released values of CPI and PPI in the United States were slightly lower than market expectations, but the retail sales data and the number of initial jobless claims released on Thursday night performed well, which made the market gradually falsify the previous expectation of recession in the United States, and the potential liquidity crisis also stalled due to the dovish performance of the Bank of Japan.
As a result, the price of gold rose strongly and hit a record high on Friday.
2. Price comparison and volatility
Last week, gold rose weaker than silver, and gold and silver fell back compared with the previous period; The increase of gold was weaker than that of copper, and the ratio of gold to copper fluctuated downward; Crude oil prices have dropped compared with the previous period, and the gold-oil ratio has fluctuated upward.
Figure 2: COMEX Gold/COMEX Silver
The gold VIX fluctuated upward, the panic in the market increased, and the demand for safe havens increased.
Figure 3: Gold volatility
Recently, the impact of the RMB exchange rate has increased compared with the previous period, and the internal and external price difference between gold and silver increased last week; The internal and external price ratio of gold has increased, and the internal and external price ratio of silver has gradually increased during the week, but it has decreased compared with the previous period.
Figure 4: Inside and outside price spreads of precious metals
3. Market outlook
Recently, domestic macro data is still unsatisfactory, especially financial data such as social financing and M1 are still weak, but this does not have much to do with the pricing of copper. On the contrary, the current downstream demand for copper is improving significantly, and last week's destocking efforts were extremely strong. Downstream companies reported that orders have been scheduled for one month, and subsequent copper prices may continue to maintain rebound momentum.
The pace of weakening U.S. economic data has slowed down, recession trading has reversed, and precious metal prices are still supported despite expectations of interest rate cuts and geopolitical conflicts, but the upward trend will not be so smooth. Pay attention to this week's Jackson Hole annual meeting Powell's statement.
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