Silver Eases, Copper Gains
Fx Empire | Jun 24, 2014 06:10AM ET
Analysis and Recommendations:
Silver eased 176 points to trade at 20.818 as traders booked profits after precious metals climbed on global tensions last week. There is underlying support from the geopolitical tension in the Middle East, but with Wall Street near record highs, risk appetite looks strong and that is hurting metals,” said a precious metals trader in Hong Kong. “Without strong demand either from the physical markets or from exchange-traded funds, the shiny metal rally is not going to last.”
Traders said physical demand across Asia had been subdued as many expected prices to fall further. Demand was also being hurt by large purchases last year, when prices fell 28%, and earlier this year.
Meanwhile, metal is being supported by geopolitical tension. Iran’s supreme leader accused the US on Sunday of trying to retake control of Iraq by exploiting sectarian rivalries, as Sunni insurgents drove towards Baghdad from new strongholds along the Syrian border. The metal was also supported by fighting in Ukraine.
Copper gained 24 points today to trade at 3.137 after Chinese HSBC PMI data showed expansion had returned to the manufacturing sector in China. Hedge funds and other money managers are increasing their bets against copper, according to U.S. data, amplifying pressure on prices following allegations of fraudulent metal-backed financing in China.
The wagers are likely to further weigh on the outlook for one of the world’s most heavily traded metals, as the effects of an official probe of stockpiles in the eastern Chinese port of Qingdao continue to ripple across global markets. The port’s operator has confirmed that Chinese authorities are investigating…
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