Written Commentary
GOLD
April gold futures are higher due to a weaker U.S. dollar. On Tuesday, President Donald Trump’s 25% tariffs on imports from Mexico and Canada took effect, alongside an increase in Chinese duties to 20%, escalating trade tensions and sparking retaliatory actions. However, U.S. Commerce Secretary Howard Lutnick indicated there might be tariff relief for Canada and Mexico.
The February ADP employment report showed an increase of 77,000 jobs, which compares to the expected gain of 162,000. This report is based on payroll data from approximately 400,000 U.S. business clients. The 8:45 central time February PMI composite is estimated to be 50.4.There are two 9:00 reports. The January factory orders report is expected to show a 1.4% increase, and the February Institute for Supply Management services index is forecast to be 53.0.
The Federal Reserve’s beige book on the economy will be released at 1:00. This book is produced approximately two weeks before the monetary policy meetings of the Federal Open Market Committee. On each occasion, a different Federal Reserve district bank compiles evidence on economic conditions from each of the 12 Federal Reserve districts.
SILVER
May silver futures are higher, supported by a weaker U.S. dollar and heightened safe-haven demand in light of global trade tensions.
On Tuesday, the U.S. introduced tariffs on Canadian and Mexican imports, as well as an additional 10% duty on Chinese goods, pushing the total tariff on China to 20%. In response, Canada imposed 25% tariffs on U.S. imports, while China revealed new levies of 10%-15% on some U.S. products starting March 10. Traders are now looking ahead to the U.S. nonfarm payrolls report due Friday for insights into the Federal Reserve’s potential interest rate moves.
On the bullish side are increasing prospects of the Federal Reserve becoming more accommodative.
COPPER
Copper futures jumped over 5% on Wednesday, reaching the highest level in nine months. This surge 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.
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