Written Commentary
COPPER
July copper futures slipped below $4.65 Tuesday morning as large supplies of US copper have limited gains.
The copper market has been signaling that it expects a US tariff will be imposed on the metal at a rate of 25%. In recent weeks, copper has flowed into the US from around the globe, causing CME copper stocks to rise over 81% since the beginning of the year and reach an eight-year high of 152,919 tons. The growing supplies of copper in the US have weighed on copper prices and shrunk the premium of CME copper over LME copper from $1,600 per metric ton to $600 per ton.
The purchasing managers’ surveys for May on Thursday will give an up-to-date indication of the health of U.S. manufacturing.
SILVER
Silver futures were up over half a percent, as the increase in safe-haven demand lifted prices for the white metal. Silver will likely benefit from any rise in gold; July silver contracts are trading around $32.71.
The long-term outlook for silver remains supportive, as silver is a key ingredient in semiconductors, solar panels, and other clean-energy technologies, which have seen high investments from governments across the globe. New data shows China’s wind and solar capacity has risen significantly in Q1 of 2025, while solar power output in Europe rose by 30% annually in the first quarter.
GOLD
Gold futures are higher, with June gold futures up over a quarter percent, supported by a weaker dollar. June gold contracts are trading around $3,242.
Despite the recent decline in gold prices, strong central bank demand and investor demand from China will remain supportive of gold’s upside. The inflow into gold-backed ETFs in April was the largest since March 2022, with Chinese funds leading the demand. In addition, China’s central bank added gold to its reserves in April for the sixth straight month.
A lowering of interest rates by the Federal Reserve would be supportive of gold prices, which benefit in a lower interest-rate environment. Markets are anticipating two 25 bps rate cuts this year, with the first cut coming at the September meeting.
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