Written Commentary
PRECIOUS METALS
Gold: Gold prices moved higher as a weaker dollar supported favorable buying conditions ahead of the releases of key US data this week, which will be fundamental in shaping the Fed policy outlook. Recent commentary from San Francisco Fed President Mary Daly suggesting that one or two rate cuts may be needed to support the labor market has reinforced expectations that policy easing remains on the table should employment conditions soften. Elsewhere, China’s central bank extended its gold purchases for a 15th consecutive month in January, underscoring continued institutional demand for safe-haven assets. Geopolitical attention also remains on US–Iran negotiations, with both sides agreeing to continue discussions this week in an effort to ease tensions and avoid escalation.
Structural support for gold remains intact as central banks continue to diversify reserves away from the dollar and increase bullion purchases, a trend expected to provide a steady underlying bid through 2026.
Markets are favorable to a cut in June, though near-term easing expectations support the view that the Fed will hold on rates.
Silver: Silver futures are up 4.5% to $80.38. Silver is likely to continue to face extreme volatility in both directions in the near term. The silver, platinum and palladium markets are small relative to gold, making them vulnerable to speculative inflows. This dynamic has presented the risk that prices have become detached from physical demand conditions. Additionally, record high prices could be poised to limit industrial demand.
Platinum: Platinum is up 0.8% to $2,116.
BASE METALS
Copper: Copper prices rose to start the week as the dollar declined. However, weak demand prospects, particularly in China, alongside rising warehouse inventories offer headwinds to bullish conditions. Benchmark three-month copper on the LME was 0.4% higher at $13,043. Copper is down 10% from a record high of $14,527.50 on January 29. The Lunar New Year in China is bringing lower trading volumes and lighter economic activity from China. Weak Chinese demand is highlighted by the Yangshan copper premium, a gauge of China’s appetite for importing copper, which is around $37 a ton.
Available stocks in LME-registered warehouses rose to 183,300 tons, their highest since May and up 25% since January 9. Meanwhile, inventories at the SHFE climbed for the ninth-straight week to their highest level since April at 248,911 tons after months of waning supply. SHFE stocks are up 60% since December 19. Reports have been circulating that the Chinese State Reserves Bureau is releasing copper into warehouses to ease recent price spikes. COMEX stocks are at a record 531,999 tons.
China announced plans to boost stockpiles of copper, though several traders have cautioned against over-interpreting the remarks. Currently, there are no details on the planned size of the reserves, scale of purchases, or timeline.
Zinc: Zinc was flat at $3,346.
Aluminum: Aluminum gained 0.7% to $3,107.
Tin: Tin rose 4% to $48,600.
Lead: Lead ceded 0.4% to $1,953.
Nickel: Nickel rose 0.9% to $17,250.
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