Written Commentary
GOLD
June gold futures extended their rally on Friday, advancing to new record highs. This surge was fueled by a weakening U.S. dollar, which declined to almost three-year lows. In addition, there is heightened demand for safe-haven assets in light of escalating tensions in the U.S.-China trade war. On April 12th, China raised tariffs on U.S. goods to 125% and signaled it would no longer respond to further U.S. actions, following a series of tariff hikes from the White House that peaked at 145%.
Federal Reserve interest rate policies are likely to underpin the price of gold since the Federal Open Market Committee is predicted to lower its key interest rate by 25 basis points four times in 2025 with the first reduction likely at the June meeting.
COPPER
May copper futures are higher, continuing their rebound. The market is weighing supply concerns against the potential decline in manufacturing demand, which is being triggered by a new wave of tariffs from President Donald Trump. In an effort to boost base metals demand, Donald Trump temporarily eased reciprocal tariffs for non-retaliating countries over the next 90 days, which helped limit supply chain disruptions for factories.
Donald Trump reiterated plans to impose copper-specific tariffs in the coming weeks. This threat has widened the premium of U.S. copper futures over comparable contracts on the London Metal Exchange, highlighting concerns over strained U.S. smelting capacity. Meanwhile, the ongoing trade war with China has intensified, with both sides increasing tariffs, further disrupting the flow of copper scrap from the U.S. to China.
SILVER
May silver futures are higher for the fourth consecutive day in light of a weaker U.S. dollar and growing economic concerns, which drove demand for safe-haven assets. The precious metal gained additional upside momentum from investors seeking alternative flight to quality vehicles, as the U.S. dollar lost some of its traditional appeal as a refuge vehicle.
Even with a temporary 90-day tariff reprieve in place, uncertainty around President Donald Trump’s trade policies continues to unsettle markets. Adding to the pressure on the U.S. dollar, was the softer-than-expected U.S. core inflation data for March, which bolstered expectations of further interest rate cuts by the Federal Reserve, and is another tailwind for precious metals like silver.
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