Saxo's Daily Financial Markets Quick Take
Podcast: Gold rips on crashing crypto. USD on edge ahead of CPI
Gold, silver and copper’s performances following last week’s FOMC meeting, when Fed Chair Powell delivered a hammer-blow to sentiment across markets, have been very impressive. Gold trades up almost 100 dollars from the post-FOMC low at $1615, now a potential triple bottom, while silver has returned to challenging the 200-day moving average at $21.50 for the first time since the April slump. In addition, supply disruptions from miners in South America, tight supply and speculation about a change in China’s approach to its handling of Covid breakouts have supported copper’s move to near the top of its current range, thereby supporting silver's outperformance against gold which has seen the gold-silver ratio drop to the lowest since April at 80 ounces of silver to one ounce of gold.
Above all, the dollar remains a key source of directional inspiration to most commodities, not least precious and industrial metals, and despite Fed Chair Powell’s attempt to present a hawkish and dollar-supportive outlook last week, the greenback continues to show signs of rolling over, not least against the euro which has moved back above parity. Futures speculators have been net buyers of the euro since late August, and in the week to November 1, the day before the FOMC meeting, buying accelerated with the net long rising to a 19-month high.