Written Commentary
BASE METALS
Copper: Copper prices rose following reports that China’s central bank has instructed local banks to boost lending this month, reinforcing Beijing’s efforts to support its economy, which has been hurt by higher energy prices and weak domestic demand. Benchmark three-month copper on the London Metal Exchange added 0.3% to $13,568. Broadly though, copper is under pressure amid renewed geopolitical uncertainty and the overnight rise in oil prices, which hurts macro sentiment. The challenge for investors is balancing the potential of weaker demand for base metals against expectations of copper shortages due to mining issues and a lack of sulphuric acid. Comex copper has dipped 0.1% to $6.37, bringing the premium of COMEX over LME copper to $456 a ton. Tariff expectations continue to pull copper into the US, which tightens availability elsewhere, adding a layer of distortion to the market.
Zinc: Zinc dipped 0.3% to $3,502.
Aluminum: Aluminum edged up 0.1% to $3,638.
Tin: Tin rose 0.8% to $54,840.
Lead: Lead fell 0.8% in official activity to $1,990. LME inventory data on Thursday showed inflows of nearly 30,000 tons of metal into warehouses in Taiwan.
Nickel: Nickel was little changed at $18,950.
PRECIOUS METALS
Gold: June COMEX contacts fell 0.6% overnight with prices hitting a two-month low, as strikes by the US and Iran renewed inflation fears, pushed up crude oil, fueling expectations of higher interest rates. Meanwhile, this morning’s PCE data has reinforced the view that Fed policy is set to stand still for the time being, while a hawkish shift lingers among FOMC members and market participants. April’s headline PCE came in slightly below the FactSet consensus of +0.5% MoM and +3.9% YoY, while core landed in-line at +0.2% MoM and +3.3% YoY. The deceleration in the monthly headline print (+0.4% vs. March’s +0.7%) reflects some moderation in energy price gains, though prices for gasoline and energy goods remain significantly elevated relative to year-ago levels given the ongoing Middle East conflict. Core PCE at 3.3% YoY, up from 3.2% in March, is particularly notable from a Fed policy standpoint. The monthly core print of +0.2% is the softest reading in recent months (versus a run of +0.3%/+0.4% prints through Q1 2026), though it is premature to read this as a definitive cooling. On an annualized basis, the 0.2% monthly core print is still well above the Fed’s 2% objective and should keep rate cuts out of the picture for the Fed. For gold, heightened geopolitical uncertainty will continue to direct risk-off flows to the dollar, while higher oil prices fuel inflation fears.
The larger macro environment remains challenging for gold as inflationary concerns remain present amid supply chain issues related to the conflict.
Silver: Silver futures are down 1.6% to $73.68.
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