Written Commentary
GOLD
April gold futures are lower but remain near historical highs. Futures are on track for their eighth consecutive weekly gain. Recent gains are being attributed to the safe-haven appeal that gold enjoys in light of ongoing global uncertainties. Earlier in the week, President Donald Trump revealed plans to impose additional tariffs on lumber, automobiles, semiconductors and pharmaceuticals, adding to existing tariffs of 10% on Chinese imports and 25% on steel and aluminum, which further escalated global trade tensions.
Swiss customs data revealed that gold exports from Switzerland increased year-on-year in January, with shipments to the U.S. hitting their highest level in at least 13 years.
Central bank demand for gold remains strong.
SILVER
March silver futures have traded in a narrow range over the last three days. However, strength earlier this month can be linked to concerns over trade and geopolitical tensions, which fueled demand for safe-haven assets. Earlier this week, U.S. President Donald Trump unveiled plans to impose tariffs on imports of automobiles, semiconductors, and pharmaceuticals, with additional measures targeting lumber and forest products, which sparked renewed fears of a global trade war.
Recent price gains for silver are linked to strong industrial demand from the electrification and manufacturing sectors. Also, there were recent reports that showed China added 357 gigawatts of solar and wind power in 2024, which increased industrial silver consumption.
Price advances have been limited due to comments from Federal Reserve officials who have recently expressed they would like to see more progress on inflation before considering further interest rate cuts.
COPPER
March copper futures have remained in a narrow trading range over the last four days as traders continue to weigh the potential effects of U.S. President Donald Trump’s tariff threats. Recently, President Trump expanded the list of sectors targeted for tariffs, adding lumber and forest products, though copper remains excluded for now. President Trump also hinted that a new trade deal with China, the world’s largest copper consumer, could be in the works, which offered a more optimistic outlook for U.S.-China relations.
Chinese authorities have placed restrictions on copper smelting due to industry overcapacity as smelting companies are struggling to stay profitable.
Prospects of a Federal Reserve that is likely to be slow to move to additional accommodation is seen as a headwind to higher prices for industrial metals.
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