With the Fed's September meeting and the midterm elections approaching, why should gold and copper wait a little longer? [Dapeng Talks 6]

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Gold’s long-term support remains, and there are also contradictions in copper’s supply and demand. Why does Da Peng Chen from Peifengke remain cautious about current opportunities in the sixth episode of "Da Peng Talks"?

The long-term logic of an asset being sound and whether now is a suitable entry point are two different issues. This is a key point for understanding this episode’s content.

In Da Peng Chen’s view, over the past two years, many movements in commodities and stocks benefited from loose monetary policy. If the Federal Reserve raises rates again, investors need to reassess the policy environment that previously supported their judgments. The importance of such turning points is often only fully appreciated in retrospect.

Copper especially reflects this contradiction. Tariffs have driven large amounts of copper to the United States, causing relatively tight supply in other regions, which provides micro-level support; meanwhile, high oil prices, potential rate hikes, and a lack of stimulus policy put pressure on the macro environment. When macro and micro factors start to “conflict,” whether and how to participate requires more careful weighing.

In this episode, Da Peng Chen frankly explains his own choices: why he recognizes certain long-term logic, yet is willing to wait; and why not rushing to go long right now does not mean turning bearish.

In addition, the upcoming US midterm elections will also impact the market.

Chen compares monetary and fiscal policy to the “two valves” controlling financial market liquidity. The Federal Reserve meeting will send signals on monetary policy, while the midterms may influence fiscal policy’s continuance. Whether the Republicans maintain control, or the Democrats take one or both chambers, the corresponding policy scenarios and asset price assumptions could be very different.

What issues are gold and copper each facing right now? Which policy changes are worth considering ahead of the next market phase?

In the sixth talk, Da Peng Chen discusses everything from the Federal Reserve decision, to gold and copper, to the various midterm election scenarios, laying out the thinking and rationale behind this caution step by step.