Coup in Guinea sets up a volatile week for metals Silver

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.

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

StoneX Financial Ltd (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.

No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

For further details see our full non-independent research disclaimer and quarterly summary.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. CFD and Forex Trading are leveraged products and your capital is at risk. They may not be suitable for everyone. Please ensure you fully understand the risks involved by reading our full risk warning.

City Index is a trading name of StoneX Financial Ltd. Head and Registered Office: 1st Floor, Moor House, 120 London Wall, London, EC2Y 5ET. StoneX Financial Ltd is a company registered in England and Wales, number: 05616586. Authorised and regulated by the Financial Conduct Authority. FCA Register Number: 446717.

City Index is a trademark of StoneX Financial Ltd.

The information on this website is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement.