Gold and Silver Losing Meddle

Rising crude prices and a stronger dollar have helped move the outlook for gold lower. With US-Iran tensions high, many analysts fear potential inflation. Changing their view, some experts now see Fed rates remaining unchanged through the year or even rising. While gold exceeded $4,150 Friday, many speculators noticed a sideways pattern. Silver contracts are also showing the same sideways pattern.

Fertile Geopolitics for the Farm

Shipping constraints and the continued Middle East conflict centered around the Strait of Hormuz continue to push up global nitrogen and phosphate prices. In addition, phosphate exported from China has slowed. The fertilizer price increase has eaten into farmers’ profits. Many growers have put off machinery purchases in an effort to meet the rising fertilizer costs necessary for crops.

Fires Force French and Spanish to Flee

Just as the fires in Spain seemed to be subsiding, tens of thousands of people had to be evacuated in France from fires there. The worst fires, along the French Atlantic coast, burned on Thursday. One fire spread over 12 square miles as water bombers and 700 firefighters battled the blaze. Scientists warned that the heat, drought and fires were caused by climate change and were likely to create further water shortages.

US Ups Tariffs

President Trump imposed new tariffs of 10% to 12.5% on dozens of US trade partners across the world. The tariffs cover goods from 60 trading partners making up 99.4% of US imports. Oil and gas imports have been exempted as have coffee and pork from Europe. Trading partners from Europe, China and India have raised objections to the tariffs, stating that any “forced labor” justifications for the increase are unfounded.

Black Sea Shipping Darkening

Major world shipowners have temporarily suspended ship arrivals at Ukraine Black Sea ports following Russian strikes. Russia has declared its own Black Sea economic zone unsafe for navigation due to uncrewed Ukrainian surface vehicles and drone strikes. The disruption to grain and oil is driving up grain prices. Soybeans and wheat hit their highest levels in two years though wheat tumbled by 50 cents from its Friday high.

CME midday prices – August Soybeans, $12.48; September Corn, $4.62; September Wheat, $6.76. Livestock per 100 pounds: August Cattle, $227.05; August Hogs, $102.85. Metals per troy ounce: August Gold, $4,067; September Silver, $58.86, September Copper per pound: $6.35. August Crude oil per barrel: (WTI) $89.10. September S&P futures traded at 7469.

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Walt Breitinger is a commodity futures broker in Indiana. He can be reached at 800-411-FUTURES (3888) or www.indianafutures.com. Pinion Futures, LLC, a CFTC registered Introducing Broker and NFA Member (NFA #0284447,) is a fully owned subsidiary of Pinion Risk Management LLC. Information contained herein is believed to be reliable but cannot be guaranteed as to its accuracy or completeness. Futures and options trading involve substantial risk of loss and is not suitable for all investors.