Written Commentary
COPPER
May copper futures are higher and reached the highest level in nine months. This surge in prices came after U.S. President Donald Trump announced tariffs on copper imports. In his speech to Congress, the President confirmed the imposition of tariffs on copper along with other base metals, reversing earlier statements that the Department of Commerce would first investigate potential levies on the red metal before any action was taken later in the year.
The tariffs would heighten reliance on domestic copper production, which is limited to only two major smelters, as the U.S. imports nearly half of its copper. Meanwhile, supply in China remained abundant, with smelters’ treatment charges staying below zero, indicating significant overcapacity in the country’s refined copper production.
GOLD
April gold futures are lower but appear to be underpinned by continuing weakness in the U.S. dollar. In addition, there has been heightened demand for flight to quality vehicles in light of uncertainties surrounding U.S. trade policies. President Donald Trump temporarily exempted U.S. automakers from his 25% tariffs on Canada and Mexico for a month and indicated he may make further adjustments. Also, a U.S. official hinted that President Trump could lift the 10% tariff on Canadian energy imports that comply with trade agreement terms.
SILVER
May silver futures are higher, driven by a weaker U.S. dollar and growing demand for safe-haven assets in light of rising global trade tensions. On Tuesday, the U.S. imposed tariffs on imports from Canada and Mexico, as well as an additional 10% duty on Chinese goods, bringing the total tariff on China to 20%. Traders are now focusing on the U.S. nonfarm payrolls report, due on Friday, for insights into the Federal Reserve’s future policy rate decisions.
Increasing prospects of the Federal Reserve becoming more accommodative is likely to underpin prices.
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