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The raging metals markets had a setback on political uncertainty and a report of the death of ‘King Dollar was greatly exaggerated. Major metal consumer India saw it stock market tumble after Prime Minister Narendra Modi failed to achieve his expected landslide and in Mexico the election of President Claudia Sheinbaum who is considered far left. The Modi landslide was not all it was expected to be and raised conerns about the direction of India and their massive and growing metals consumption. Also reports that Mexican Mayor Yolanda Sanchez and her bodyguard were murdered are raising concerns about the future of the Mexican government and people.

Geop political risk factors may rise on a New York Times report that said ‘official said Ukraine had destroyed missile launchers in the Russian region of Belgorod using an American-made rocket system. Just days after the Biden administration granted permission for Ukraine to fire American weapons into Russia, Kyiv took advantage of its new latitude, striking a military facility over the border using a U.S.-made artillery system, according to a member of Ukraine’s Parliament.

Precious metals of course in recent weeks have been getting supported by massive central bank buying in places like India and China and the concern was that many of these governments were looking to diversify themselves from the US dollar that according to the Federal Reserve Bank of New York that m maybe those concerns have been a bit overstated.

Today we should get a little bit of a bounce from the US ADP employment change index it showed that new jobs according to ADP came in at 152,000 which was well below the 175,000 jobs forecast and even more below last month’s number of 192,000.
The weakening of the jobs market should support gold and silver as it will give the Federal Reserve more room to cut interest rates if they cut rates that will make the dollar weaker in the metals stronger.
According to a new poll the Federal Reserve is expected to cut rates by at least 50 basis points in 2024 and the expectation is that the Fed rate cut will be 25 basis points in September. How convenient! Just before the election!

The market is right in the US getting back on a rate-cutting path that’s going to be very bullish for gold demand, especially on the retail side. Heated interest rates have held back retail demand even as central bank demand has gone crazy.

Many people theorize the reason why central banks have been dumping the dollar in favor of gold is because politically they do not like the Biden administration nor trust them. Turns that Bidens foreign policy have caused our competitors and even some of our friends to ditch the dollar in anticipation of a new economic powerhouse coming out of China India and Saudi Arabia.

Yet do not count out King Dollar yet.

Kitco News Reported that “The de-dollarization trend that has dominated global financial markets for nearly two years and supported gold prices at record highs is less dramatic than initially portrayed, according to a research report from the Federal Reserve Bank of New York.

In a report published last week, analysts at the regional central bank argued that while global U.S. dollar assets held by central banks have fallen 7% between 2015 and 2021, countries are not moving away from dollars en masse.”

Based on what we’re seeing here we believe that the gold and silver move is far from over and we are looking for opportunities to put on positions both with futures and options perhaps a good strategy if you’re concerned about the volatility is to buy the futures and sell calls against it to give yourself a little bit of protection.

Silver still is undervalued compared to gold and we do expect that silver will eventually hit a new all-time high in the coming months but before we get there get ready for some incredible rides it’s going to be driven in part by fed policy the economic data as well as the increasing demand for silver in terms of electronic and the energy needed to power data centers and artificial intelligence.

Copper of course is on the front lines of the now that’s going to be needed to complete the energy transition and to power the electronic needs of the future. The growing risk of a long-term copper shortage cannot be ignored long term copper.

A report from that the International Energy Forum that had an ominous report. They wanted that to “Just to meet business-as-usual trends, 115% more copper must be mined in the next 30 years than has been mined historically until now. To electrify the global vehicle fleet requires bringing into production 55% more new mines than would otherwise be needed. On the other hand, hybrid electric vehicle manufacture would require negligible extra copper mining.”

Very thinly traded Palladium market looks like it may be finally bottoming out amazingly even with the strong demand for Palladium in the tight supply prices are down about 16% on the year we think the market is trying to bottom in the 908-area basis of the September contract and those with fancy deep pockets may want to consider trying to position Palladium down in this area.

Looks to be back in vogue back above $71,000 a coin today the charts on Bitcoin looked very bullish right now Ethereum is also up 1.29% this morning.

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