Written Commentary
GOLD
April gold futures advanced to above the 2830 level, reaching a three-month high as investors adjusted their positions after key U.S. economic data, yesterday’s Federal Open Market Committee statement and Federal Reserve Chair Powell’s press conference. The Federal Reserve kept its key interest rate unchanged at 4.25% to 4.50% as expected. Today the European Central Bank lowered its key interest rate by 25 basis points as predicted, which supported precious metals prices. Yesterday the Bank of Canada lowered its key rate by 25 basis points.
Today’s U.S. economic reports were offsetting. The gross domestic product in the fourth quarter increased at an annualized rate of 2.3% when up 2.6% was expected, and personal consumption expenditures at an annualized rate were up 4.3% when a gain of 3.1% was anticipated. Jobless claims in the week ending January 25 were 207,000 when 224,000 were estimated.
SILVER
March silver futures advanced to the highest level since December 12 in light of forecasts of a significant market deficit for the fifth consecutive year in 2025. This outlook was fueled by improving industrial demand and strong retail investment, which are expected to outpace weaker consumption in jewelry and silverware. Even though global silver supply is anticipated to rise this year, with increased output from China, Canada, and Chile, the ongoing deficit is expected to continue.
Investors are closely monitoring the potential impact of President Trump’s escalating tariff threats on the silver market.
COPPER
March copper futures are higher. However, gains are being limited by growing tariff concerns from President Donald Trump, which continue to dampen market sentiment. Earlier this week, President Trump unveiled plans to impose tariffs on imports of chips, pharmaceuticals, steel, aluminum and copper in an effort to boost domestic production.
Meanwhile, recently U.S. officials gave conflicting signals about whether the administration will move forward with its proposed tariffs on Mexico, Canada and China by February 1. China, which is the world’s largest consumer of copper, recently released data that showed an unexpected decline in manufacturing activity in January. With Chinese markets closed for the week-long Lunar New Year holiday, trading volumes are expected to be lighter than usual.
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