Open: London Session | Forex, Metals, Oil, Agriculture August 03, 2020

Chicago-traded corn futures fell nearly 7% during July, but hedge fund managers have not materially changed their views toward the yellow grain since the first week of the month. MARKET NEWS U.S. wheat futures fell as much as 1% as ample supplies and concerns over international demand weighed on prices.

Then came the paper dollar currency which for Americans could not be converted into physical gold, while sovereign foreign countries maintained that privilege. Create the currency and expect unpredictable levels of price inflation collapsing the dollar’s value; or don’t create the currency and expect global loan implosion. The last retreat from gold backing the dollar occurred in 1971, when the gold window was closed to foreign sovereigns. With lower yields, there is lower carry to be earned by parking in the dollar, so the currency would be expected to weaken.
– gold was solidly bid into the close of the week and month on Friday, managing to ignore the stumble in the US dollar. Also, a strong dollar causes problems for emerging markets. If it avoids going much higher in the next few weeks, that would help the dollar: Beyond that, nothing matters more than a vaccine. The ruble in euro terms closed at its weakest level Friday since March and is down over 10% versus the Euro since late June.0715-0800 – Euro Zone Final Jul.
Points of Return Follow Us Get the newsletter False Positive Is the decline of the dollar over? What will drive the dollar from here?

In this environment, it is possible insurance and pension funds are preferring gold over debt instruments yielding next to nothing or even negative. Gold bonds offer an annual interest rate of 2.50 per cent to investors. Particularly the last two weeks, gold has pretty much gone parabolic. Real yields are a huge driver of gold prices. The daily upper Bollinger band is sharply rising, and gold is rallying with it. Gold ($1,985.90/ounce) is hitting new highs.
As recently as March 16, gold bottom-ticked $1,450.90. Silver, meanwhile, continues to churn around in the $23-25/oz.

Malaysian palm oil futures surged as much as 3%, mirroring solid gains in Dalian palm oil and rival soy oil, with better July exports also aiding sentiment. It’s leading to new fears that , akin to the drone and missile attack which temporarily halted all Saudi oil exports last year at Aramco’s Abaqaiq oil processing facility. Petrobras refined 2 million liters of soy oil in one of its Southern refineries, resulting in 40 million liters of renewable diesel. Petroleo Brasileiro SA, as the company is formally known, is awaiting approval from Brazil’s oil regulator ANP, after the company concluded tests this month.
Opinion Trading saved European Big Oil from the full impact of the petroleum crisis, but firms shouldn’t get too comfortable, Julian Lee writes for Bloomberg Opinion. As firms become more focused on natural gas, electricity and hydrogen, the ability to offset weaknesses in core activities through trading profits is likely to be curtailed.
Shell profited by buying and storing crude while selling forward in the derivatives market. Trump may want to coerce the Germans to buy oil/gas products from someone else.

Nancy Pelosi, Steve Mnuchin and the White House’s Mark Meadows all took to the Sunday shows to present their views after a three-hour meeting a day earlier. That was a week ahead of the Fed’s March 23rd announcement of open QE; the S&P 500 bottomed on that date as well. The Fed’s failure to buy additional debt with its simultaneous creation of dollars would cause massive loan defaults that could crash the global banking system. So the lax monetary policies of the FED and commercial banks did stimulate this economy for many years, and satisfied credit needs of those consumers who always needed “more”.
As for Las Vegas, we noted last week, it could take three years for the gambling city in the US to recover.
Strong results from tech giants helped the S&P 500 climb 5.5per cent last month, while the NASDAQ rose 6.8per cent. The Fed must be committed to rolling over loans, lending more, and provide the necessary liquidity – thereby averting the global looming shortage of dollars. If the nations do not pay up, which could be bad for their health, then Trump does not seem particularly worried about this troublesome organization changing or dying out.
In response, I think the Fed will move to eliminate paper currencies which can be hoarded or saved to a digital currency which they can completely control electronically. A month before this historic tweet Trump had already threatened to remove 9,500 U.S. soldiers from Germany, shifting many to Poland, i.e.

Wealthy countries are first in line, with about 1.3 billion doses of potential shots secured by the U.S., EU, Britain and Japan. This quickly arrives to affect the weaker countries of the European Union and soon affects all of Europe. In this instance having your troops deep in the heartland of the EU away from the Russian front makes no sense. Fish are chips in Brexit gamble.