U.S. bond yields rose further last week, putting gold under pressure, but the long-term narrative has not changed. As far as copper is concerned, the performance of copper prices in the past two weeks has been extremely calm and in a state of volatility convergence, just as all kinds of assets have amplified fluctuations due to Trump's coming to power, thus pricing in advance the possibility after he took office.
CORE POINTS
1. Copper prices continued to fluctuate last week, and gold fell back after hitting a new high
In terms of precious metals, COMEX gold fell 0.55% and silver fell 5.22% last week; The Shanghai Gold 2410 contract fell 0.46%, and the Shanghai Silver 2410 contract fell 5.12%. Among the prices of major industrial metals, COMEX copper and Shanghai copper changed by-7.53% and-3.01% respectively.
2. Volatility continues to converge, waiting for the general election to land
Under the circumstances that all kinds of assets amplify fluctuations due to Trump's coming to power, thus pricing in advance his possibility after taking office, the performance of copper prices has been extremely calm in the past two weeks, and it is in a state of volatility convergence.
3. Trump's trading is suspended, interest rates rise, and gold is under pressure after hitting new highs
The price of gold once hit a new high last week, but then fell back after hitting a new high. First of all, the previous rise of gold is not unrelated to the market pricing of the further expansion of Trump's debt after he took office, but Trump's trading ebbed in the middle of the week; Secondly, U.S. bond yields rose further last week, rapidly rising to more than 4.3%. After interest rates reached a certain threshold, they still suppressed gold; Finally, short-term gold bulls are too crowded and need to be adjusted.
1. Base metal market review
Market Observation
Last week, COMEX copper prices continued to fluctuate, and the operation rose slightly again. Under the circumstances that all kinds of assets amplify fluctuations due to Trump's coming to power, thus pricing in advance his possibility after taking office, the performance of copper prices has been extremely calm in the past two weeks, and it is in a state of volatility convergence. Even last week's ADP employment and surprising NFP data, which exceeded expectations, did not bring much fluctuation to copper prices. The dust will settle in the US election this week, and it may be a week to decide the direction.
In terms of positions, from the perspective of CFTC positions, the proportion of non-commercial long positions declined last week, matching the price shock. There are many key events this week, and the volatility is expected to increase.
Figure 1: CFTC fund net positions
Precious metals market review
Precious metals market observation
Last week, COMEX gold prices first rose and then fell, while silver prices continued to fall. COMEX gold and silver operated within the range of US $2,395-2,489/oz and US $29.1-31.7/oz. As various economic data released by the United States fell beyond expectations, concerns about recession became the anchor point of recent overseas market transactions.
As a result, the price of gold rose rapidly and the overall non-ferrous metals continued to run weakly. Since then, with the rebound of the US dollar and interest rates, the price of gold fell rapidly..
Price comparison and volatility
Last week, silver fell stronger than gold, and the gold-silver ratio fluctuated upward; Copper prices traded sideways, and the gold-copper ratio fluctuated upward; Crude oil prices fluctuated within a narrow range, and the gold-to-oil ratio was basically flat.
Figure 2: COMEX Gold/COMEX Silver
Gold VIX rose again, and the market's safe-haven demand was once again reflected.
Figure 3: Gold volatility
Recently, the impact of the RMB exchange rate has weakened compared with the previous period, and the internal and external price difference between gold and silver rebounded last week; The internal and external price ratio between gold and silver has dropped.
Figure 4: Inside and outside price spreads of precious metals
Market outlook
Indicators such as the October PMI released last week performed well, showing that economic activity has picked up month-on-month, but copper prices have performed relatively calmly.
Although gold has pulled back from its high level, the long-term bullish logic is still solid. And in terms of interest rates, the factor that suppresses gold in the short term, the current ten-year yield above 4.35% is unlikely to be a long-term stable interest rate level. Once the interest rate falls in the future, the suppression of gold will weaken.
$WTI Crude Oil Main 2412 (CLmain) $
$NQ100 Index Main 2412 (NQmain) $$SP500 Index Main 2412 (ESmain) $ $Gold - main 2412(GCmain)$ $Copper - main 2412(HGmain)$
Comments