Metals heated up is inflation cooled down lower than expected producer price indexes caused a surge of buying even as concerns about Chinese economy and their steel industry are weighing on industrial metals. In fact, if inflation cools down and the Fed can cut rates the metals have significant upside ahead of them.Aluminum prices platinum and palladium really popped. All the talking over is trying to come back even if it seems to continue to be undervalued compared to gold. Gold futures prices were up 0.2% to $2,513.8 a troy ounce, nearing the record $2,537.7 a troy ounce reached in July. Just remember if the consumer prices come in week, then the heat will be on in the metals.It’s that time of year! Time for a copper strike.
Barron’s report that “Workers at the world’s largest copper mine in Chile are striking after pay talks with Australian resources giant BHP fell apart, casting a shadow of uncertainty Wednesday over the market for the commodity. The Escondida mine in northern Chile yearly digs up around five percent of the world’s copper, a coveted metal used in everything from electrical wiring to rechargeable batteries.A global glut in copper stockpiles should blunt the immediate impact of the strike, analysts said, although there are fears it could start to bite if production is slowed for more than a week or two according to Barrons.Concerns about Chinese demand have weighed on copper but is the coal market suggesting that China is about to turn around when it comes to demand for copper? China’s coal imports hit a record 249.6mln mt in 1H24, an astounding 11.9% year-on-year increase according to BreakWave Advisors.Palladium maty bottom as the death of the internal combustion engine is greatly exaggerated and the catalytic converters will still be needed.
Now with reports that that Ukraine is moving military operations further into Russia could at some point limit the supply.
According to Statista, 75% of all mined palladium comes from Russia and South Africa, so this could be an event to watch.
Reports say that Ukraine has continued its advance into Russia’s Kursk region, its commander-in-chief said. He said Ukraine controlled 74 settlements as of Tuesday.
He said Ukraine added control of more than 15 square miles on Tuesday.
So, it’s a world faces uncertainty surrounding global economic conflicts what is a better safe haven play gold or Bitcoin?
Kitko news reported that “gold could be as a leading indicator for Bitcoin”.There has been a lot of talk around gold and Bitcoin as strategic reserve assets in recent weeks, largely due to political positioning ahead of the upcoming U.S. elections, and while gold has long been considered a reliable store of value, Bitcoin has struggled to keep up with the yellow metal’s recent rise.“Bitcoin has underperformed gold during the recent selloff, moving in tandem with tech equities,” wrote analysts at Kaiko. “The BTC to gold ratio, which measures the relative performance of the two assets, dropped to its lowest level since February on Aug. 5, despite inching up slightly since then. When the ratio declines, Bitcoin underperforms, and vice versa.”
Does this recent underperformance mean that Bitcoin is losing its safe-haven appeal?” they questioned.
“While most ETF issuers are pitching Bitcoin as a complement or an alternative to gold, the two assets have different fundamental drivers.”
“This is evident when looking at the 60-day correlation between Bitcoin and gold, which has been fairly weak, oscillating between -0.3 and 0.3 over the past two years,” they said. “Bitcoin’s price has been closely tied to U.S. markets and has largely benefited from increasing institutional adoption following the lau “In contrast, gold has shown resilience to tightening global monetary policy, boosted by strong central bank demand,” they said. “Central bank gold purchases doubled in 2022 and have remained high in 2023.”According to Charles Edwards, founder of Capriole Investments, based on its past
correlation with gold, the outlook for Bitcoin could soon improve as the top crypto has a tendency to lag behind macro moves in gold by a few months. launch of spot ETFs in January.”
We were recommending bullish option plays in the metals and they look like they’re starting to pay off.More By This Author:The Energy Report: Lean Forward
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