Written Commentary
PRECIOUS METALS
Gold: Gold prices drifted modestly lower as traders took profits following the prior session’s 1% advance, though steady long-term buying interest continued to offer underlying support. January’s US jobs report surprised to the upside, with payrolls rising 130,000 against expectations closer to 70,000 and the unemployment rate edging down to 4.3%, reinforcing the view of a labor market that remains resilient.
The stronger-than-expected data reduced the likelihood of a near-term Fed rate cut, with March easing expectations largely non-existent and June no longer fully priced in. Markets, however, continue to anticipate policy easing beginning in July with an additional move later in the year, limiting downside pressure on longer-term gold demand despite short-term rate repricing.
Investors are now looking ahead of Friday’s inflation figures, which will be fundamental in shaping the Fed policy outlook. Recent commentary from several Fed officials has been somewhat hawkish, reinforcing expectations that an extended pause until the summer is likely. San Francisco Fed President Mary Daly suggested that policy remains well positioned to support the labor market and fight inflation, while Dallas Fed President Lorie Logan reiterated similar comments. Both Presidents are voters on this year’s committee.
Structural support for gold remains intact as central banks continue to diversify reserves away from the dollar and increase bullion purchases, a trend expected to provide a steady underlying bid through 2026.
Silver: Silver futures are down 1% to $83.65. Silver is likely to continue to face volatility in both directions in the near term. The silver, platinum and palladium markets are small relative to gold, making them vulnerable to speculative inflows. This dynamic has presented the risk that prices have become detached from physical demand conditions. Additionally, record high prices could be poised to limit industrial demand.
Platinum: Platinum is down 1% to $2,125.
BASE METALS
Copper: Copper prices rose, supported by a stronger risk-appetite across global markets, with benchmark three-month copper on the LME added 0.5% to $13,237 earlier in the morning. Volatility in LME copper has declined since the metal hit a record peak of $14,527 in late January, which was fueled by speculative buying. The price is still up 35% over the last six months.
Demand conditions have largely cooled after Chinese buyers completed their buying ahead of the Lunar New Year holiday. Analysts from Morgan Stanley said that China’s fourth-quarter copper consumption fell 12.3% year-over-year, despite a 4% rise in demand. Consumption data out of China will be on hold until March due to the Lunar New Year holiday, set to begin on February 15.
Available stocks in LME-registered warehouses continue to climb, with recent figures showing stocks at 192,100 tons, their highest since May. LME inventories are up over 25% since January 9. Meanwhile, inventories at the SHFE climbed for the ninth-straight week to their highest level since April at 248,911 tons after months of waning supply. SHFE stocks are up 60% since December 19. Reports have been circulating that the Chinese State Reserves Bureau is releasing copper into warehouses to ease recent price spikes. COMEX stocks continue to see daily inflows and are at a record 535,430 tons.
China announced plans to boost stockpiles of copper, though several traders have cautioned against over-interpreting the remarks. Currently, there are no details on the planned size of the reserves, scale of purchases, or timeline.
Zinc: Zinc rose 0.3% to $3,417.
Aluminum: Aluminum gained 1.4% to $3,145. Australia’s South32 reaffirmed it would put its Mozambique aluminum plant on care and maintenance next month after a drought hit power supply.
Tin: Tin shed 1.2% to $49,050.
Lead: Lead edged up 0.2% to $1,996.
Nickel: Nickel slipped 1.2% to $17,660 on profit-taking. Nickel jumped 2.2% on Wednesday after news that Indonesia sharply cut this year’s mining quota. French miner Eramet said its PT Weda Bay Nickel venture with China’s Tsingshan and Indonesia’s PT Antam had received an initial production allowance of 12 million wet metric tons for 2026, down from 32 million wet tons for 2025.
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