As of this writing gold is up one percent; new all-time highs on the print and almost definitely on the close. Copper is up 4%. And Silver is up 5%. Massive.
The day started with gold sideways and choppy; silver strong, up about $20, and copper absolutely ballistic up 4%. Then Silver proceeded to blow sky high. This was all on the back of the China stimulus news.
HOW IT NORMALLY WORKS
The copper rally in no small part was a reaction to the stimulus. Industrial commodities will do well when China stimulates.
China does these things to get their stocks to stabilize. And it seems that every time they do stimulate, industrial commodities like copper, iron rebar, and oil will rally. Silver then rallies. And finally, Gold will rally. That’s how it has worked for over a decade in the micro.
TODAY WAS DIFFERENT.
Today was a little bit of a twist. The order of rally was consistent with historical behavior. But the magnitude of Silver’s move was something to behold.
To be completely honest, silver rarely, if ever outperforms a copper move like this on day-one of a China stimulus event.
One more comment we want to add that hopefully sums it up: the Goldman silver report that we discussed today in the morning rundown was not a recommendation… it was a confirmation.
That report was a checkpoint to their bigger clients that said “so far so good, stay the course”
You have to be out of your mind to be short gold going into the election. And now it seems like silver might be that way as well.
The caveat, they’re always is a caveat, is they raise silver margin requirements again. Buying opportunities now will continue to present themselves as moments of liquidation during sell-season run into a very early start to buy season.
We’re in an unprecedented seasonal overlap. That is almost definitely a function of the big events coming up. Cheers.
A truly beautiful market day, great to see both metals and mining sector moving to the upside.
Boo-yah!!!