Silver Futures Market News and Commentary
Dec Comex gold (GCZ19) on Wednesday closed up +10.5 (+0.71%), and Dec silver (SIZ19) closed up +0.043 (+0.25%). Precious metals prices settled higher due to a weaker dollar and a slump in stocks. Gains in silver were limited as weak economic data raised demand concerns for industrial metals. The dollar index slid to a 3-week low Wednesday after the weaker-than-expected Sep U.S. retail sales report bolstered the outlook for additional Fed stimulus, which is bullish for gold prices. Wednesday's U.S. Sep retail sales report unexpectedly fell -0.3% and -0.1% ex-autos, weaker than expectations of +0.3% and +0.2% ex-autos and the first decline in 7 months. The weak retail sales report, however, was bearish for silver and industrial metals prices due to the implication of slower U.S. economic growth. Concern that Hong Kong tensions may derail a U.S./China trade agreement weighed on stocks and boosted gold prices after China's foreign ministry on Wednesday threatened unspecified "strong countermeasures" if the U.S. Congress passes a bill offering support to pro-democracy protesters in Hong Kong. Gold prices also found support Wednesday on comments from Chicago Fed President Evans who said, "there is an argument for more accommodation now to provide some further risk-management buffer against potential downside shocks." The Brexit situation improved a bit Wednesday, which boosted GBP/USD to a 5-month high and is negative for safe-haven demand of precious metals, after UK Brexit Secretary Barclay told a parliamentary committee Wednesday that UK Prime Minister Johnson will seek an extension on Saturday if a deal hasn't been reached by then. Fund buying has been prevalent as long gold positions in ETFs have risen for 21 consecutive days up to a 6-1/2 year high Monday. Ongoing trade and geopolitical tensions, along with dovish central bank expectations, sparked fund buying of precious metals as long gold positions in ETFs have risen steadily over the past four months up to a new 6-1/2 year high Monday and long silver positions in ETFs rose to a new record high on Sep 2.