Written Commentary
GOLD
April gold futures are lower and are heading for its first weekly decline in nine weeks, as a stronger U.S. dollar exerted pressure, fueled by President Donald Trump’s tariff agenda. On Thursday, President Trump confirmed that a 25% tariff on Mexican and Canadian goods would take effect on March 4, with an additional 10% tariff on Chinese imports.
Strength in gold earlier this month is linked to increased safe-haven demand, increasing expectations of accelerated Federal Reserve interest rate cuts and growing inflows into gold-backed exchange-traded funds. Since December, over 600 tons of gold have been transferred to New York City vaults , according to the World Gold Council.
SILVER
May silver futures are lower, influenced by uncertainty in demand. Hecla Mining, the largest silver producer in the U.S., reported a 13% increase in silver production for 2024, reaching 16.2 million ounces.
On the demand side, U.S. silver coin purchases fell 27% year-over-year in January to 3.5 million ounces, marking the lowest January demand since 2018.
Weaker U.S. economic data boosted expectations for further interest rate cuts from the Federal Reserve, providing some support to precious metals. Investors also monitored trade developments after President Donald Trump initiated a probe into potential tariffs on copper imports to increase U.S. production.
COPPER
May copper futures have come under pressure recently due to a series of weaker than expected economic reports in the U.S.
On Thursday, Trump also confirmed that his proposed 25% tariffs on Mexico and Canada would take effect on March 4, alongside a 10% duty on Chinese imports. These actions increase the risk of a global trade war, which could dampen demand, especially in China, which is the world’s largest copper consumer.
In the longer term, analysts expect copper prices will increase due to strong demand for electrification, while supply growth is likely to be limited by years of underinvestment in mining capacity. However, copper supply in China remains plentiful, with stocks increasing to over 260,000 tonnes, which is three times the amount at the beginning of the year, while bonded stocks have doubled to 33,000 tonnes.
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