Dec Copper Hits Highest Level in Over 2 Months

GOLD

December gold futures advanced to a new record high. Much of today’s strength is linked to news that a large country in Asia is implementing additional stimulus initiatives in the form of lower interest rates and reduced reserve ratio requirements.

In addition, gold futures are being supported by increasing probabilities of a more aggressive easing policy from the Federal Open Market Committee. It is widely expected that the FOMC will reduce its key interest rate again at its November meeting. Currently there is a 49% probability that the Federal Open Market Committee will lower its fed funds rate by 25 basis points at its November 7 policy meeting, and there is a 51% chance that the FOMC will reduce its key rate by 50 basis points.

Also, gold’s status as a safe haven was further bolstered by rising tensions in the Middle East.

SILVER

December silver futures are higher but remain in an eight-day congestion pattern. Some of today’s gains can be linked to news that a top silver consuming country in Asia initiated a variety of easing measures to support their economy.

Increasing prospects of a more accommodative Federal Reserve and a weaker U.S. dollar index today also supported silver prices.

COPPER

December copper futures are higher and are closing in on the $4.50 per pound level, hitting the highest level in over two months after a major copper consuming country in Asia unveiled a series of easing measures to support the economy. Recent price gains can also be attributed to last Wednesday’s Federal Open Market Committee decision to lower its fed funds rate by 50 basis points, boosting the global economic outlook.

In addition, there is some support for copper futures due to energy shortages in Zambia, which pressured output from one of the world’s main copper ore producers.

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