Written Commentary
BASE METALS
Copper: Copper prices fell as pressure from rising inventories and muted trading activity from China weighed on the metal. Benchmark three-month copper on the LME was down 0.6% at $13,093. Demand conditions have 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 jumped to 189,100 tons, their highest since May, after 4,800 tons were delivered in warehouses. 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 lost 0.3% to $3,366.
Aluminum: Aluminum fell 1.1% to $3,091.
Tin: Tin dipped 2.0% to $48,100.
Lead: Lead dropped 0.3% to $1,964.
Nickel: Nickel shed 1.0% to $17,180.
PRECIOUS METALS
Gold: Gold prices moved higher as the dollar weakened following the release of disappoint retail sales figures out of the US. Investors are largely looking ahead of the release Wednesday’s jobs report and Friday’s inflation figures, which will be fundamental in shaping the Fed policy outlook. Recent commentary from San Francisco Fed President Mary Daly suggesting that one or two rate cuts may be needed to support the labor market has reinforced expectations that policy easing remains on the table should employment conditions soften. Elsewhere, White House economic adviser Kevin Hassett said on Monday that job gains could be lower in the coming months due to slower labor force growth and higher productivity.
Markets are favorable to a cut in June and another reduction in policy by October. 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.
Elsewhere, China’s central bank extended its gold purchases for a 15th consecutive month in January, underscoring continued institutional demand for safe-haven assets. Geopolitical attention also remains on US–Iran negotiations, with both sides agreeing to continue discussions this week in an effort to ease tensions and avoid escalation.
Silver: Silver futures are up 0.25% to $82.40. Silver is likely to continue to face extreme 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 up 0.5% to $2,126.
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