Written Commentary
GOLD
June gold futures fell sharply after President Trump announced on Sunday that the US would delay imposing 50% tariffs on the EU from June 1st to July 9th to allow time for trade negotiations. Following the announcement, the EU announced it would speed up tariff talks with the US, easing trade war concerns. The news also supported the dollar, further pressuring gold prices.
Strong central bank demand and investor demand from China remain in favor of gold’s upside. The inflow into gold-backed ETFs in April was the largest since March 2022. China’s central bank added gold to its reserves in April for the sixth straight month. Chinese customs data showed gold imports surged 73% in April to an 11-month high of 127.5 metric tons, as Beijing expanded import quotas during a period of trade tensions with the US.
Investors await Friday’s PCE inflation data for insights into the Fed’s interest rate outlook. A lowering of interest rates by the Fed would be supportive of gold prices, which benefit in a lower interest-rate environment. Markets are anticipating two 25 bps rate cuts this year, with the first cut coming at the September meeting. Weakening economic data will raise pressure on the Fed to cut rates and also spur safe-haven demand for gold. The long-term outlook of a weakening dollar will also be supportive of gold prices.
COPPER
July copper futures are lower, pressured by a stronger dollar and overall trade uncertainty despite the recent developments between the US and EU.
Seismic activity at Ivanhoe Mines’ large mine in the Democratic Republic of Congo has caused the miner to halt underground mining operations, offering some support for copper. The DRC is the largest copper producer in Africa, and a halt in operations at the mine for the remainder of the year could remove about 150,000 tons of supply.
Last week, Eurozone and UK manufacturing PMI readings came in lower than expected, showing a contraction of manufacturing activity. Eurozone manufacturing PMI was 48.4 vs. expectations of 49.2, while the UK also posted a decline in manufacturing activity with a reading of 45.1 vs. expectations of 46.2. Meanwhile, in the US, May’s manufacturing PMI rose to 52.3, above expectations and rising well above April’s reading of 50.2.
CME copper stocks have risen over 81% since the beginning of the year and reached an eight-year high of 152,919 tons. The growing supplies of copper in the US have weighed on copper prices and shrunk the premium of CME copper over LME copper from $1,600 per metric ton to around $600 per ton. According to US government data, copper imports in March rose to more than 123,000 tons compared with around 58,000 tons in February and 76,000 in January.
Expectations of copper surpluses continue to hang over investors’ heads. The International Copper Study Group forecasts surpluses to reach 289,000 tons in 2025, noting that international trade policy is likely to weaken the global economic outlook and negatively impact copper demand. Abundant ore production from South America has exacerbated the oversupply situation; global mine production is expected to increase by 2.3% in 2025.
SILVER
Silver futures fell on reduced safe haven demand and a stronger dollar following the recent trade news between the US and EU.
The long-term outlook for silver remains supportive, as silver is a key ingredient in semiconductors, solar panels, and other clean-energy technologies, which have seen high investments from governments across the globe. New data shows China’s wind and solar capacity has risen significantly in Q1 of 2025, while solar power output in Europe rose by 30% annually in the first quarter.
Interested in more futures markets? Explore our Market Dashboards here.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
