industrial metal of high-demand, is receiving multiple upside signals. The
metal rose by 11% from $9400 to $10,400 per ton on the London Metals Exchange
on October 13-19. Also, an important $10,000 resistance was easily broken as
the trend is currently pointing towards $10,800 per ton.
many reasons for this rally. The demand rose dramatically as global economies
are recovering. But the supply is struggling as fuel prices peaked to record
highs, pushing energy prices above all expectations.
been acting more like an alternative to the Dollar rather than a safe haven
asset this year, and now it is acting more like risky assets. Such a
transformation is due to the unprecedented stimulus package from the U.S.
Federal Reserve (Fed). The fact that there is more money in the market at a
time when interest rates are low, creates a situation in which gold prices are
being pushed up as part of this money is being used to buy gold assets. While
gold is acting more like a risky asset, the U.S. Dollar may be seen to be
acting like a safe haven asset.
Global economic growth
faced a serious sudden throttle with contradictory consequences, as high energy
prices were globally boosting inflation. Logically, low inflation was a serious
problem for economic growth in preCOVID-19 years, meaning low consumer and
investment demand hampered economic growth.
injections from the world’s major central banks, of which the Federal Reserve was
among the first to take action, reversed this trend to a large extent and
bailed countries out of economic turmoil.
September 23rd, the Bank of England (BoE) joined a relay race after
the U.S. Federal Reserve (Fed) had made its move towards monetary tightening.
The U.S. monetary policymaker clearly indicated that it is going to taper
quantitative easing before the end of this year.
The BoE did not point
to any additional monetary stimulus measures in its statement, as it kept its
interest rate unchanged at 0.1% together with the 895 –billion-pound ($1.23
billion) bond purchase program.
Silver is a
metal that is primarily used for manufacturing and less as a precious metal. It
is used in high-technological processes thanks to its high conductivity, in
manufacturing solar cell batteries and electric vehicles.
demand and the price of silver is directly linked to the business activity
worldwide. The latter is highly dependent on the spread of Delta variant and the
Federal Reserve’s (Fed) stimulus measures perspectives. Such attributes
distinguished silver price movements at the beginning of this week.
prices are moving along with the Dollar-denominated assets against the Greenback
this week. The U.S. Dollar fell under pressure after Federal Reserve (Fed) Chairman
Jerome Powell last Friday reiterated his commitment to easy money with
vast monetary injections into economy.
The decline of the Dollar
was immediately used by alternative assets to make an upside jump in prices,
including platinum. It rose from $975 per ounce on August 27 to above $1011 on
the last summer day, and now is trading slightly above $1007 per ounce.
The paramount intrigue of the week is the results of the Jackson Hole conference run by the Federal Reserve (Fed) and the statement of its Chairman Jerome Powell that is going to take place on Friday. Financial markets are desperately waiting for the major Fed policymaker to announce further perspectives surrounding the monetary policy.
However, the Fed is in awkward situation as, on the one hand, it has clear signs of economic recovery with 6.6% GDP up in the second quarter of 2021, and above 6.4% in the first quarter of this year, together with the first estimate of Q2 GDP growth being 6.5%.
of this week, was expected to bring
about high volatility in the markets suddenly. But the truth of the matter is
that it is showing extreme fragility and uncertainty with price movements and
factors affecting it. Investors are trying to tune into any kind of signals
that would reflect the policy of the Federal Reserve (Fed). In fact, markets
are picking up some signals that were considered with low relevance before.
was suddenly interrupted by worse July unemployment data compiled by ADP.
Pound is among the most prominent currencies that are seen to be benefiting from
the U.S. Dollar weakness in the end of July. And, there are several drivers that
seem to be pushing the Pound upside.
Dollar is consciously being pressured by the Federal Reserve (Fed) with its
loose monetary policy. The Fed and its Chair Jerome Powell reconfirmed recently
its commitment to continue quantitative easing policy with pumping as much as
$120 billion each month for an uncertain period of time.
prices have been performing a downside movement since mid-July as they fell
from $1146 per troy ounce to $1054, or by almost 8%. Platinum went under a
global sell off of risky assets used for the production of other items – crude,
stocks, metals, etc. fell victim to negative market sentiment as new, more
contagious and deadly COVID-19 Delta and other strains spread around the globe.
signals of possible early tapering of monetary stimulus in the United States due
to the rise in inflation levels are seen to be much more visible recently.