Written Commentary
PRECIOUS METALS
Gold: June COMEX stayed rangebound overnight, finding support at the psychological $4,500 level. Risk sentiment is constructive overall, with lower Treasury yields and a softer dollar, while oil prices declined on hopes that disruptions in the Strait may ease. In a social media post, President Trump said that talks with Iran were “proceeding nicely,” although he noted that he was prepared to order more strikes against Iran after the US sank two IRGC ships attempting to lay mines in the Strait. Both sides have signaled progress on a memorandum of understanding that would stop the war and restart shipping through the Strait, while giving negotiators 60 days to iron out complex details regarding Iran’s nuclear program. Secretary of State Marco Rubio said that negotiating a deal to halt the conflict could “take a few days.” Still, the larger macro environment, remains challenging for gold as inflationary concerns will remain present amid supply chain issues related to the conflict. Markets are now focused on upcoming PCE inflation data for further policy signals, while broader precious metals also came under pressure amid the shift in rate expectations.
April’s FOMC meeting minutes confirmed that “many” policymakers are now leaning toward further tightening—a signal just shy of a majority that still points to growing internal support for hikes and diminishing odds of a near-term easing pivot under Warsh. Structural support for gold remains intact with central bank purchasing expected to offer underlying support amid lower prices and elevated yields. Several large banks have trimmed their near-term price forecast for gold amid softer investor demand. The main driver for gold remains oil, the dollar, and yields.
Silver: Silver futures are 0.60% higher at $76.65.
BASE METALS
Copper: Copper prices fell overnight on the LME as a flare up in US strikes against Iran created uncertainty over US-Iran peace talks. Benchmark three-month copper on the London Metal Exchange fell 0.4% to $13,610. The International Copper Study Group (ICSG) said that the global refined copper market showed a 30,000 metric tons surplus in March, compared with a 270,000 metric tons surplus in February. For the first 3 months of the year, the market was in a 396,000 metric tons surplus compared with a 135,000 metric tons surplus in the same period a year earlier, easing supply worries. Despite the pullback, support for copper remains underpinned by the rally in AI-related stocks, reinforcing expectations for rising demand tied to electrification and data center wiring requirements.
Available copper stocks in LME-registered warehouses fell to a 10-week low, LME daily data showed on Friday, after 53,325 tons were earmarked for delivery. More than half of those cancellations were in LME warehouses in the US, where COMEX copper continues to trade at a premium over LME prices as traders await Washington’s decision on whether to impose import tariffs. If the administration decides not to tariff the metal, a massive return of copper back to the broader market risks sending prices lower.
In China, the Yangshan copper premium, a gauge of China’s appetite for importing copper, closed at $73 a ton last week, its highest since mid-April. However, demand is expected to weaken as the country enters an off-season. Copper stocks in warehouses monitored by the SHFE this week rose for the first time since mid-March, gaining 1.6%.
Zinc: Zinc rose 1.0% to $3,577.
Aluminum: Aluminum rose 0.8% to $3,680. Aluminum prices hit their highest in more than four years, as rising prices for the feedstock alumina add to concerns about tightening supply amid the conflict in the Gulf.
Tin: Tin added 0.5% to $54,450.
Lead: Lead gained 0.2% to $2,015.
Nickel: Nickel lost 0.8% to $18,760.
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.
