Powell’s On The Prowl. Manic Metals Report

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Fed Chairman Jerome Powell seems to be on the prowl seeking to cool off the metals market inflation expectations. On the one hand, seemed to suggest that a rate cut could happen this year. Yet it was Powell's flair for the dramatic when he said “Inflation Not the Only Risk We Face” metals markets like gold and silver to pull back.
Fed chairman Jerome Powell slowed the upward momentum in both gold and silver yesterday after discussing the future of interest rates and the risks that remain to the overall economy what’s the thing that we could see an interest rate cut this year he did say that inflation is not the only risk that we see to the economy and that they were really need to see more evidence that there is a sustainable push on inflation to below the target 2% rate.
Yet Demand for Gold seems to be resilient. The World Gold Council said that following the strongest month since May 2023, global gold ETFs have now seen inflows two months in a row; in June, notable European and Asian buying offset outflows from North America,
They said that although June and May's inflows helped limit global gold ETFs’ y-t-d losses to US$6.7bn (-120t), this remains the worst H1 since 2013 – both Europe and North America saw hefty outflows while Asia was the only region with inflows
A stronger gold price and recent inflows pushed the total AUM to US$233bn, but collective holdings remain near their lowest since 2020
Trading volumes across different gold markets witnessed a mild decline in June; however, the H1 average remains well above its 2023 level as OTC and futures trading were exceptionally active.
Take the reason we saw the outflows of course is that the buying ng in gold was tempered with the fact that prices had shot up so quickly. We do know that the Chinese central bank stopped purchasing gold for the second month in a row mainly on concerns that prices are too high we fully expect that China will resume their gold buying.
Silver also has been on a slippery slope but is still extremely undervalued when compared to gold silver seems to be ‘
rebounding and the greatest thing silver has to fear as Federal Reserve Chairman Jerome Powell himself.
Copper can’t decide whether weak inflation in China is bullish or bearish copper gave up its gains yesterday because of a rising dollar and the ongoing concerns about the Chinese economy.’
Copper also took a hit after Jerome Powell began to speak. Today weak inflation data out of China caused copper to dip but later we flipped as the market started to realize that maybe weak inflation is what the world really wants.

Reuters reported that “ China once again holds the key to copper’s fortunes as the market waits for the world’s largest buyer to shake off its property woes and join the bull party.  The signs are mixed, to say the least.
China’s manufacturing sector contracted for the second consecutive month in June, albeit with some offset from a more positive Caixin survey, which captures smaller, export-oriented manufacturers.
Shanghai Futures Exchange (ShFE) copper stocks remain elevated at 321,642 metric tons, breaking the seasonal pattern of strong draws after the Lunar New Year holidays.
It seems like aluminum is following copper to a certain extent so copper does well we would expect them to try to keep pace.
But the man for platinum and Palladium is going to be extremely strong in the coming years and China is moving to try to take advantage of the situation by launching its own futures contract
The South China Post reported that the Guangzhou Futures Exchange (GFEX) said on Tuesday it plans to launch its first platinum and palladium futures contracts in China, the world’s second-largest economy, to offer a domestic price-hedging mechanism.
The GFEX will be the first exchange to allow delivery against its contracts of platinum and palladium in a form used by the main consumers, including carmakers and other industrial sectors, and the contracts may also support platinum investment demand in China.
“Our exchange fills a gap in the Chinese market, providing the mechanisms to discover the domestic prices of platinum and palladium in China and help businesses hedge price risk,” Chen Xuanchen, GFEX’s R&D lead for platinum and palladium futures, was quoted as saying in the World Platinum Investment Council (WPIC) statement.

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