Written Commentary
BASE METALS
Copper: Copper prices are lower, with benchmark three-month copper on the LME falling 0.5% to $12,840, facing continued pressure from rising warehouse inventories and negative sentiment stemming from the conflict in Iran. Weaker growth prospects out of China have pressured the metal. Copper is on course to lose 3.8% this week, its steepest weekly dip since the week ended April 2025.
Copper inventories in US warehouses approved by the London Metal Exchange climbed by 2,450 tons overnight to 284,325 tons, the most since October 2024, following inflows to Singapore and New Orleans. The increase reflects a pricing dynamic between exchanges. LME copper currently trades at a premium to COMEX prices, incentivizing traders to move metal into LME storage locations. As a result, US inventories now account for roughly 24% of total copper held in the LME warehousing network, the largest share since April 2024. Meanwhile, the large build in COMEX inventories seen last year, driven by concerns about potential US import tariffs, has stabilized, with stocks hovering around 545,000 tons.
China signaled that its economy is entering an era of slower expansion, after setting a target for GDP growth of between 4.5% – 5% this year to mark the lowest target since the 1990s. If China’s economy were to expand at a pace below 5% in 2026, it would be the slowest growth reported by the country in more than three decades, other than during the Covid-19 pandemic years.
The projection comes after mixed factory data out of the country, with the official PMI index tracking state-owned manufacturers coming in slightly weaker than expectations. The reading fell to 49.0 in February from 49.3 in January, a 4-month low and under forecasts for a reading of 49.1. Weak domestic demand pressured the figure despite a recovery in exports from private sector firms. However, the RatingDog China General Manufacturing Purchasing Managers’ Index, compiled by S&P Global, rose to 52.1 in February from 50.3 previously. Averaging out both figures, the headline reading picked up from 49.8 to a five-month high of 50.5.
Zinc: Zinc added 1.1% to $3,262.
Aluminum: Aluminum prices rose again on Friday after snapping a three-day winning streak on Thursday, and are heading for their biggest weekly gain in more than 18 months as supply concerns due to the conflict in Iran. Aluminum was up 1.9% to $3,360. LME aluminum is on course for a weekly gain of 7.3%. Force majeures from Mideast smelters Qatalum and Aluminum Bahrain have heightened supply fears. The Gulf region produced 8% of the world’s aluminum last year. The shutdown of Qatari smelter Qatalum is expected to be completed by the end of March and could take six-to-twelve months to restart.
Aluminum stocks in the LME-registered warehouses fell by 2,250 tons to 456,875 tons, the lowest since July last year. There was an order to remove more than 45,000 tons from the Malaysian storage location earlier this week, suggesting traders are looking to cash in on supply shortages. Meanwhile, SHFE stocks have risen 10.8% from a weak ago to 394,498 tons, their highest level since April of 2020.
Tin: Tin rose 0.5% to $50,150. Tin has recently been pressured by reports that Myanmar’s Wa region is taking steps towards the gradual restart of mining operations.
Lead: Lead inched down 0.1% to $1,940.
Nickel: Nickel gained 0.9% to $17,380. Indonesia’s nickel miners association said the government allotted a nickel ore output quota of 260 million tons for 2026. There will be an opportunity to propose a revision on the quota, it added.
PRECIOUS METALS
Gold: Gold prices are higher, with April COMEX contracts up 0.80% at $5,120, as a weak headline nonfarm payrolls figure for February reinforced the case for Fed easing later in the summer, though a stronger dollar and broader inflationary worries are likely to offer headwinds to prices. Crude oil prices rose above $90 a barrel, as the conflict in Iran continues to trigger supply worries and halt traffic in the Strait of Hormuz.
Headline payrolls declines by 92,000, while December and January saw a combined downward revision of 69,000 jobs. The headline figure marks a clear cooling in job growth, though the decline was partly driven by temporary factors, particularly healthcare strike activity. The unemployment rate edged up to 4.4%, though remained largely stable suggesting the labor market remains broadly stable.
Markets have shifted back to favor easing later in the summer with July cut now priced more favorably. The probability of a June rate is now at 46% after falling to 31% on Thursday. Total easing for year-end has widened to 43 bps, still below 46 bps on Wednesday and 53 bps last week.
On one hand, heightened geopolitical tensions in the Middle East support safe-haven demand for bullion. On the other, the risk of a prolonged surge in energy prices may reinforce inflation concerns and limit expectations for Fed rate cuts. That dynamic is likely capping upside in gold by increasing the opportunity cost of holding the metal.
That said, the broader fundamental backdrop remains supportive. Persistent geopolitical tensions, central bank demand, and macro uncertainty continue to underpin structural demand for bullion, suggesting the recent pullback reflects position adjustment rather than a material shift in underlying fundamentals. Friday’s jobs report will be scrutinized for whether the data alters expectations for the policy path following a strong report for January.
Silver: Silver futures are up 1.00% to $82.86
Platinum: Platinum is down 0.90% to $2,109.
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