Gold, Silver Fall Back as Copper Drifts

Precious Metals

Gold: Gold prices are lower despite November’s CPI reading lowering yields and the dollar as a risk-on rally in the equities took hold. Consumer prices rose 2.7% year-over-year in November, well below forecasts of 3.1% and a drop below September’s 3.0%. Core prices rose 2.6% year-over-year, below forecasts and September’s reading of 3.0%. Headline CPI rose 0.2% between September and November, below expectations of a 0.3% rise and a relatively slower rise than earlier in the year, as the data reflects a two-month difference due to the lack of data collection in October as a result of the shutdown. Core inflation also rose at the same pace, reflecting a wave of disinflation over the period. Easing shelter (0.2% vs. 0.4%) and food (0.1% vs. 0.2%) prices helped bring the headline reading down despite a 1.1% rise in energy costs. However, the technical fix that was required to collect some of the data due to the shutdown may have biased the figures downward. Markets will have to wait for December’s reading to fully understand how price pressures have moved and could see an upward revision to the data.

President Trump said on Wednesday that the next Fed chairman will be someone who believes in lower interest rates “by a lot.” Trump will announce the successor to current Fed Chair Jerome Powell early next year. Fed Governor Christopher Waller, a candidate for the Fed chair, said on Wednesday the central bank still has room to cut interest rates amid rising job market weakness. November’s nonfarm payrolls report came in above expectations but showed an uptick in the unemployment rate and largely reflected subdued hiring conditions.

Meanwhile, geopolitical risks remain elevated after President Trump ordered a “total and complete” blockade of sanctioned Venezuelan oil tankers, following last week’s seizure and a US military buildup, partly offsetting easing risks tied to progress in Russia–Ukraine peace talks. However, on Wednesday, Russian President Putin signaled that he has no intention of easing his demands for Ukraine to surrender territory.

Markets will also monitor any news regarding the Supreme Court’s ruling on President Trump’s sweeping tariffs, as the president recently signaled that he expects an unfavorable ruling. President Trump has continuously reiterated that the effects of appealing the tariffs could be disastrous for the economy, signaling that he could be expecting an unfavorable ruling towards his trade policies. Trump did suggest that the tariffs could stay but would require a longer implementation process, while calling the ruling the greatest threat to national security in history. Trump argued that his method of instituting tariffs is far less cumbersome than other methods, suggesting that if the court knocks down his tariffs, there are still feasible ways to implement them.

Silver: Silver futures are down 3% to $64.74, erasing some of yesterday’s surge of 4% to all-time highs as investors have increasingly been more attracted to the metal. Industrial demand for silver is expected to remain robust through 2030 as growth in solar energy, electric vehicles, data centers, and artificial intelligence drives consumption, the Silver Institute noted in a recent research report. Prices have been further supported by persistently tight supply and falling global inventories, resulting in a supply-demand deficit that is expected to continue over the coming years.

Platinum: Platinum is down 0.3% at $1,934.

Base Metals

Copper: Copper prices were down 0.1% at $11,726 earlier in the morning after falling yesterday as a spike in volatility makes rounds due to a reduction in trading activity near the holidays. A wave of profit taking has also been giving the metal slight headwinds after it repeatedly broke record highs. Underlying fundamentals still offer the metal a solid floor for prices as supply-side challenges continue and face robust demand due to the technology sector, leading the copper market to be in an expected supply deficit in 2026.

Disappointing economic reports out of China came Sunday night, showing retail sales growth that was much weaker than expected, while fixed asset investment fell 2.6%, which was worse than an expected -2.3% and below the previous -1.7% reading. China’s factory output growth slowed to a 15-month low, while retail sales posted their worst performance since the country abruptly ended its “zero-COVID” curbs, highlighting the urgent need for new growth drivers heading into 2026. China has recently pledged to keep expanding domestic demand and the broader economy in 2026. However, solid growth in key industries such as EVs, AI data centers, and energy infrastructure boosted consumption outlooks. Data center demand construction and further energy infrastructure developments in the US are also expected.

Flows to COMEX warehouses continued due to higher prices in the US, leaving tighter supply elsewhere around the globe. The US excluded refined copper from the 50% import tariffs that came into force in August but kept it under review, which has led to expectations that US tariffs on copper will be announced in mid-2026. That dynamic has lent continued support to LME -COMEX arbitrage, as US inventories of copper approach 500,000 tons. As long as US prices remain elevated due to tariff expectations, flows into the US are expected, keeping LME-COMEX arbitrage trade going.

Zinc: Zinc fell 0.8% to $3,049.

Aluminum: Aluminum dropped 0.3% to $2,896. Australia’s South32 said it would place the Mozal aluminum smelter in Mozambique under care and maintenance by March after failing to secure a power deal with the government. Morgan Stanley expects aluminum prices to reach $3,250 per ton by the second quarter of 2026 as demand outpaces supply.

Tin: Tin added 1.6% to $42,950 after earlier touching $43,345, its highest since April 2022. The metal used in circuit boards has attracted record long positions from fund managers and is up almost 47% in 2025, making it the best performer in the LME complex.

Lead: Lead lost 0.2% to $1,957.

Nickel: Nickel gained 1% to $14,530.

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