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 After gold new record high and a big rebound in silver aluminum finally saw its pop top off. A gap up on aluminum and a rounded bottom make it look like this market is going to rise and maybe a sign that China stimulus. The Aluminum Monthly Metals Index (MMI) had dropped by 5.14% from July to August but know may be responding to the hopes for more Chinese stimulus to kick in.As we mentioned yesterday the IBD and Reuters, reported that an unnamed policy adviser to Beijing said the Chinese government may raise the limit on the amount of bonds approved for issuance this year, which would widen the deficit.Reuters also cited a recent report in the government-run China Daily that Beijing “should consider additional direct support to consumers worth at least 1 trillion yuan ($139 billion) — either cash or vouchers.” Growing anticipation of meaningful stimulus follows a series of weak data points. China retail sales rose just 2.2% from a year ago in July, even as industrial output grew 5.1%.It also helped copper and aluminum.PTI reported that aluminum prices on Tuesday climbed 1 percent to Rs 227.70 per kilogram in futures trade as speculators built up fresh positions amid a positive trend in the spot market. On the Multi Commodity Exchange, aluminum contracts for September delivery increased Rs 2.25 or 1 percent to Rs 227.70 per kg in a business turnover of 1,379 lots. Analysts said fresh positions created by traders amid demand from consuming industries supported aluminum prices in the futures market.Copper has also made an impressive bottoming formation as supply concerns woes are reappearing.Reuters is reporting that Mining giant BHP’s (BHP.AX), opens new tab quick fix to a recent six-day strike at its huge Escondida copper mine in Chile could set the tone for upcoming negotiations elsewhere, with workers emboldened by high copper prices to push for a larger share of the profits. Members of Escondida’s powerful Union No. 1 signed a sweetened deal on Sunday after walking off the job a week ago when contract talks collapsed, demanding better pay and benefits at the world’s biggest copper mine.”
Gold is the perfect hedge for everything. The Fed Minutes could drive gold to a new record high if they are dovish.China central bank buying is returning but consumer demand in China weak.
Bloomberg is reporting that Chinese gold imports in July fell 24% to 44.6 tons, the lowest in more than two years, according to customs data released on Tuesday. That follows an even sharper decline in June, when shipments plunged 58% from the previous month. The biggest hit has come to discretionary purchases of item like jewelry, while bars and coins continue to attract demand from investors seeking a store of value in uncertain times according to Bloomberg.
Yet FXS reported that The People’s Bank of China (PBoC) issued new gold import quotas to banks which “triggered speculation of a renewed wave of demand,” according to broker SP Angel. Safe-haven demand for Gold in China rose after Chinese 10-year Government Bond yields fell to record lows last week and, as a result, “Chinese buyers are seeking alternative safe-haven protection, with Gold an obvious candidate,” added the broker.India Gold Demand is also bouncing back. The JP reported that India’s gold demand surges: Recent reduction in import duty has sparked a significant increase in gold purchases.
Domestic gold prices fluctuate: Prices have dropped due to lower import duty but remain elevated year-to-date due to global factors. Investment in gold ETFs grows: Tax benefits and increasing gold prices have driven investments in gold ETFs. RBI expands gold reserves: India’s central bank continues to buy gold, boosting its reserves. Positive outlook for gold demand: The World Gold Council predicts a 50-ton increase in gold demand in the second half of 2024.
According to a new report by the World Gold Council, the import duty reduction has led to a 6% month-on-month drop in domestic gold prices, making the yellow metal more affordable for consumers. This, coupled with the ongoing festive season, has created a perfect storm for gold sales. “Anecdotal reports suggest that there has been strong buying interest from jewelry retailers as well as consumers since the duty reduction,” the report states.
Silver also made a very impressive move as it trying to keep someone in line with the record-breaking gold prices again the bounce and industrial metals helped silvers mood and that could keep the entire complex on fireMore By This Author:Copper Popper – Manic Metals Report
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