Written Commentary
SILVER
March silver futures are higher and are being supported by the bullish interest rate implications of this morning’s December producer price index report. In addition, some of today’s gains can be attributed to a lower U.S. dollar. A weaker U.S. dollar makes silver, which is priced in dollars, less expensive for buyers using other currencies, leading to higher demand.
Despite the recent dip in prices, silver saw an almost 3% advance last week, which was its best weekly performance since mid-November.
The metal’s value remains supported by improving industrial demand, especially in renewable energy and electronics, as well as ongoing concerns over supply.
COPPER
March copper futures are steady after on Friday hitting their highest levels in over two months, despite the challenges of a stronger U.S. dollar. Recent data showed imports of unwrought copper and copper products to China increased by 18% to 559,000 tonnes in December, marking the highest level in 13 months. This surge suggests an increased demand from smelters, potentially signaling higher manufacturing activity ahead.
In addition, China’s exports surpassed expectations. This positive momentum was bolstered by China’s commitment to aggressive economic stimulus measures, including both monetary and fiscal policies, to stimulate consumption this year.
However, advances have been limited due to the recent increase in the value of the U.S. dollar.
GOLD
February gold futures were higher in the overnight trade in light of the weaker U.S. dollar. In addition, futures quickly advanced when the bullish U.S. December producer price index report was released.
In the longer term view, the precious metal remains supported by ongoing geopolitical tensions and expectations of continued central bank buying.
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