Precious Metals Rally on Safe-haven Flows

PRECIOUS METALS

Gold: Gold and silver gapped higher at the open, likely safe-haven buying following that news out of Venezuela, although equity and currency markets have largely shrugged off the US military action that saw the removal of longtime president Maduro. However, a lack of further escalation, alongside the decisiveness of the operation present minimal opportunities for a spillover in conflict and seem to present minimal downside risks in regard to geopolitics. In the equities, outside of defense-related and energy stocks, effects from the conflict appear to be negligible. Still, that has not stopped safe-haven buying, with gold up over 2% and moving past its 200 day MA.

December nonfarm payrolls report will come Friday and offer a solid assessment over the labor market in a report which should be free from any shutdown related impacts, giving markets a clear look into the health of the labor market. ISM Manufacturing PMI data will be out later Monday morning and offer a snapshot on economic activity in the US and how companies continue to manage tariff-related costs. Recent data and PMI surveys have suggested that price pressures are declining, although November’s CPI inflation report did little to reassure that trend given the downward bias of the data collection efforts. December’s nonfarm payroll report will offer the first set of data on the labor market that has not been affected by the shutdown and will offer a snapshot into how the labor is performing. Fed Funds futures are favorable to a rate cut from the Fed in April, followed by another reduction in July or August, while the Fed’s latest dot plot suggests that policymakers expect just one cut in 2026. The dot plot showed that policymakers are almost evenly split on how monetary policy should precede in 2026, but President Trump’s Fed nominee is expected to support further easing in the economy. The president said he would be announcing his nominee for the Fed in January, so markets will continue to keep an ear open for the announcement.

Silver: Silver prices are up 7.5% to $76.37 after hitting an all-time high of $83.62 last. Silver is benefitting from safe-haven buying and increased investor attention. Thin liquidity over the holiday period intensified price movements, which saw the metal experiencing choppy trade in recent trading. The gold-silver ratio has stabilized around 59 in recent days after plummeting from 81 in late November, hitting its lowest level since August of 2013. Since 2022, the gold-silver ratio has largely maintained a range between 75-95, but shot to as high as 105 in April as gold prices soared and silver remained relatively subdued, in part thanks to weak retail investor attention and global economic slowdown worries, which weighed on silver’s industrial demand side.

Platinum: Platinum is up 5.5% to $2,242. Prices have found support from a recent pivot by the European Union on its 2035 combustion-engine ban, a tight supply backdrop, and rising investment demand. Platinum and palladium are both used in cars to reduce exhaust emissions. The EU’s extension regarding the delay of its engine ban is indefinite and will also require stricter emission standards, which could require higher platinum and palladium contents in exhaust systems.

BASE METALS

Copper: Copper prices surged higher following news of a strike at a Chilean mine, sparking up supply concerns once again. Benchmark three-month copper on the rose as much as 4.4% to $13,020, beating a previous record of $12,960 last week. Capstone’s Copper’s Mantoverde copper and gold mine in northern Chile is the subject of the current strike. However, the mine only produces between 29,000 and 32,000 metric tons of copper a year, which is a only a fraction of global mined output. Still, for traders it reinforces recent worries over supply shortages as many copper mines have faced serious setbacks and delays in 2025, which stemmed production. Copper demand is expected to rise about 3% in 2026, thanks in part to AI data center infrastructure demand, which is likely to land copper in a 300,00 – 400,00 ton deficit for the year.

Elsewhere, LME stocks stand at about 142,550 tons, which puts the figure down 55% since late August as flows of the metal head to the US in anticipation of expected tariffs on the metal. Meanwhile, demand in China, the world’s biggest metal consumer, remains higher than originally expected, with January-November imports down only 3% year-over-year.

Zinc: Zinc gained 2.1% to $3,193.

Aluminum: Aluminum was up 2.1% at $3,076, moving above the $3,000 level for the first time in over three years following the shutdown of the Mozal smelter in Mozambique. Supply constraints have also been strained from the EU’s new carbon tax, which consequently has reduced the flow of the metal into the trade bloc. Additionally, China announced a 45 million-ton output cap, which has fueled some supply shortage concerns.

Tin: Tin climbed 5% to $42,440.

Lead: Lead rose 0.6% to $2,018.

Nickel: Nickel firmed 0.6% to $16,910. Nickel has found recent support following an announcement from the Indonesian government that proposed cutting nickel ore output by a third in 2026. Indonesia’s mining minister recently announced that the country would be reducing mining quotas in an effort to support prices.

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