Shine Off in Safe-Haven Silver Futures | RJO Futures

October 4, 2016 5:34AM CDT

The shine is off silver futures prices due to the overall weak trend in the metal sector, as Deutsche Bank scrambles to regain its hold in the financial markets and investors back off from safe-haven commodities futures markets.

The December contract in silver futures was down 3.30 percent at 18.245 an ounce in Tuesday morning commodities futures trading.

The rest of the metals sector of the commodities futures markets fared nearly the same; December gold futures were down 2.08 percent at 1,285.4 an ounce, while the same contract month in copper futures prices fell .55 percent to 2.18 on Tuesday. Recently, strong US economic data such as US consumer sentiment data and ISM manufacturing data strengthened the US dollar and weighed on gold futures prices, which earlier in the day reached the lowest level since Britain's vote to leave the European Union in June. Meanwhile, slowing demand from copper-consuming nations is keeping a lid on copper futures prices, though signs of stability in China’s economy will add stability in the coming weeks, according to analysts.

There is little data for commodities futures markets participants to contend with on Tuesday, and many are already on the sidelines ahead of Friday’s September Employment Report. Monday's data showed U.S. factories expanded in September, prompting speculation in the commodities futures markets that the U.S. central bank may lift rates at its December meeting. New York Federal Reserve President William Dudley said the Fed would probably not be able to cut interest rates as aggressively as the last time around if it were faced with a U.S. recession in the next few years.

The International Monetary Fund (IMF) cut its estimate for U.S. economic growth in 2016 to 1.6 percent from the 2.2 percent it had predicted in July. The American economy grew 2.6 percent in 2015. The IMF says weakness in the U.S. is offset by improving prospects among developing economies. Commodity prices have stabilized after last year's free fall, which badly damaged developing countries that export raw materials such as iron ore and copper.


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