Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
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Investors shunned gold yesterday, turning instead towards the wider precious metals market. Industrial demand is driving the likes of silver, platinum, palladium and copper to highs not seen in months, or in some cases, years. Silver is an essential element for solar panels, batteries and other electronics, while platinum is crucial for systems such as catalytic converters, used to reduce emissions. Given their critical role in green energy technologies, both metals exploded to the upside yesterday following an announcement from Chinese Premier Xi Jinping, who pledged new green energy targets for the world’s second-largest economy. Silver pushed past $45 per ounce on Thursday, meaning it only has another $5 to go before setting a new, all-time record high. Meanwhile, platinum gained over 3% over the same time frame to close comfortably above $1,500 an ounce, matching prices from back in 2013. Palladium and copper are also on the front foot this week, with the former up 9% since Monday.
Second-quarter GDP figures were revised to the upside yesterday, indicating that the US economy grew by 3.8% in Q2, surpassing initial estimates of just 3%. The correction was mostly due to a revision in consumer spending as opposed to any rebalancing of trade flows. Yesterday also revealed better-than-expected jobless claims, an improved trade balance and higher durable goods orders. Strong growth figures obviously counter the narrative of a troubled economy, which in turn temper the Fed’s willingness to intervene too drastically during the next couple of FOMC meetings. Interest rate traders are still leaning in favour of a further 50 basis points in cuts before the end of the year but FedWatch is currently only pointing to a 60% chance of that happening. The combined data led to a strong move in the dollar, which dragged the DXY back up to the mid-98 level by yesterday’s close.
The shift in expectations contributed to a broad selloff in assets, with US and European indices ceding ground during yesterday’s session and Asian stock markets reacting poorly this morning. The selloff extended to cryptocurrencies, leading to Bitcoin falling below $110k and Ethereum losing $4,000. Expectations could shift again later today however, with the release of the latest PCE Price Index and Michigan Consumer Sentiment. The PCE data has long been held in high regard by the Fed and so any unexpected reading will have further consequences for interest rate predictions. Busy end to the week.
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