Metals Pack Fundamental Analysis October 21, 2014 Forecast – Silver & Copper

Analysis and Recommendations:

Silver added 34 points as traders took advantage of steep price declines to buy up the cheap commodity while Copper touched its lowest level after drastic declines on Friday as markets worried about global growth. Copper continued its decline to trade at 2.994 down by 10 points today.

Silver prices in the international markets declined diverging from gains in gold prices. Although, dollar index lost its value by around 1 percent, weakness in Nickel prices acted as a negative factor for prices.  Spot silver prices in the international markets declined by 0.63 percent and closed at $17.23

The Commodity Futures Trading Commission (CFTC) Commitments of Traders report in the week to 14th October reported that silver net shorts have increased by 2018 contracts to 9089 contracts up by 29% week on week. Weakness in the base metals pack will exert downside pressure on price. Hedge funds and money managers have been bearish on the commodity for last thirteen weeks in a row acting as a negative factor for prices. However, If gold prices turn higher this week, silver prices will move in tandem.

LME Copper prices plunged by 1.6 percent last week to their lowest levels in six months as signs of muted inflation signaled lower metal demand in the two biggest consumers, China and the US. Further, whopping gain of 5.3 percent in LME copper stocks acted as a negative factor. However, the People’s Bank of China told financial executives last week that it plans to extend as much as 200 billion yuan ($32.8 billion) in short-term loans to 20 large banks, with the goal of spurring lending activity and boosting growth. The move comes on the heels of a cut to short-term borrowing rates for Chinese banks on Oct. 14, the second such reduction in less than a month. These efforts restricted further downside in prices.

FxEmpire provides in-depth analysis for each currency and commodity we review. Fundamental analysis is provided in three components. We provide a detailed monthly analysis and forecast at the beginning of each month. Then we provide more recent analysis and information in our weekly reports.

Today’s economic releases actual vs. forecast:

 

Upcoming Economic Events that you should be monitoring:

Government Bond Auction

Date Time Country Auction

Oct 21 10:30 Spain 3 & 9M T-bill auction

Oct 21 11:00 Finland Maximum Eur 1bn 2.75% Jul 2028 bonds

Oct 21 11:00 Norway Nok 3bn 3% Mar 2024 bonds

Oct 21 11:00 UK GBP 3bn 2.75% Sep 2024 Gilt

Oct 21 12:30 ESM Up to Eur 1bn 6M T-bills (Apr 2015)

Oct 22 11:30 Germany Eur 2.0bn 2.5% Aug 2046 Bund

Oct 23 11:03 Sweden Sek 1bn 0.5% Jun 2017 I/L bond

Oct 23 17:00 US Announces 2/5/7Y Note & 2Y FRN auctions on Oct 28/29/30

Oct 23 17:30 Italy Announces details of BTPei/CTZ auctions on Oct 28

Oct 23 19:00 US USD 7bn 30Y TIPS auction

Oct 24 17:30 Italy Announces details of BOT auction on Oct 29

Oct 27 12:30 Germany Eur 2.0bn new 12M Bubill (Oct 2015) auction

Oct 27 18:30 Italy Announces details of BTP/CCTeu auctions on Oct 30

Oct 27 12:10 Italy BTPei/CTZ auctions

Oct 28 12:10 Italy BOT auction

Oct 28 19:00 US 2Y Note auction

Oct 29 12:03 Sweden Bond auction

Oct 29 12:30 Germany Eur 4.0bn Aug 2024 Bund auction

Oct 29 17:30 US 2Y FRN auction

Oct 29 19:00 US 5Y Note auction

Oct 30 12:10 Italy BTP/CCTeu auctions

Oct 30 19:00 US 7Y Note auction