Coup in Guinea sets up a volatile week for metals - Silver

Disappointing U.S. payroll data, likely reflecting the spread of the delta variant, helped key metal prices rally into the weekend. A military coup in Guinea over the weekend guarantees further volatility for metal’s prices in the week ahead.

Energy 15

Guinea competes with Australia as Chinas largest supplier of bauxite, the world’s most common sauce of Aluminium. Last week, Aluminium touched a new ten-year high on strong demand, and when Chinese smelters have been under pressure from authorities to rein in the countries carbon emissions. Aluminium is trading 3.2% higher today on the Shanghai Futures Exchange. 


Guinea is also the home of the Simandou mine, the largest high-grade iron ore deposit in the world. The Simandou mine will come online later this decade and play a crucial part in China’s efforts to diversify its iron ore supplies away from Australia and Brazil. 

Contractors have begun building a railway 679km through the Guinean countryside to the coast. Plans are afoot to excavate a deep-water port at Matakong on the Atlantic coast to load the iron ore. On the Shanghai futures exchange, iron ore futures are trading over -6% lower today at 736 yuan per tonne. 

Silver is another metal that has caught the eye after drifting off the radar following the failed trader rebellion silver squeeze in February and after its flash crash in early August, closing 3.39% higher on Friday at $24.69. 

The “flash crash” $22.10 low appears to have completed a corrective sequence from the February $30.14 high and the rally from the $22.10 low now has a more impulsive look after Friday’s rally. Providing silver can hold above support $24.00/$23.70 allow the rally to extend towards the 200 day moving average at $26.00, before trend channel resistance at $27.40. 


Silver Daily Chart

Source Tradingview. The figures stated areas of September September 6th, 2021. Past performance is not a reliable indicator of future performance. This report does not contain and is not to be taken as containing any financial product advice or financial product recommendation

More from Silver

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.