Written Commentary
COPPER
Copper futures rose on the Israel-Iran ceasefire news which lifted market sentiment and lowered the dollar, lifting support for copper.
New home sales figures are due Wednesday, durable goods orders, the third estimate of US first quarter gross domestic product, weekly jobless claims, and pending home sales are due Thursday, followed by the final June University of Michigan consumer confidence survey Friday. The data will provide key insights to traders who look to gauge demand for copper in the US.
The LME has imposed new restrictions on holders of large positions in nearby contracts amid low inventory levels. LME took action after premiums for nearby copper contracts jumped to their highest levels since October 2022. The restriction requires holders of long positions which are greater than the total stocks levels to lend back to the market at a zero premium. Copper stocks in LME registered warehouses at 94,675 tons have dropped more than 65% since the middle of February and are at their lowest since August 2023 while copper inventories at the CME continue to break record highs. Traders and producers rush to get copper in the US before an expected tariff is levied. CME copper stocks as of today are at 203,335 tons, over a 100,000 ton increase since late March.
Monday’s Commitments of Traders Report showed managed money traders were net sellers of 3,051 contracts of copper for the week ending June 17, reducing their net long to 23,625.
GOLD
Gold futures are lower as markets assess the ceasefire between Israel and Iran, which has gotten off to a rocky start with both sides claiming violations and exchanging strikes. President Trump said he was unhappy with the continued attacks by both countries and urged Israel not to drop bombs.
On the monetary policy front, Federal Reserve Policymaker Michelle Bowman, who is a well-known hawk, said Monday the US central bank should consider cutting interest rates soon. Bowman, the Fed’s vice chair for supervision, said the time to cut interest rates may be fast approaching as she has grown more worried about risks to the job market and less concerned that tariffs will cause an inflation problem. Chicago Fed President Austan Goolsbee also said on Monday that thus far the surge in tariffs has had a more modest impact on the economy relative to what was expected. Focus this week on the economic front will be data Friday on the US core personal consumption expenditures price index for May. This is the Federal Reserve’s preferred measure of inflation and could provide insights on the trajectory for interest rates.
China aims to increase its gold resources by 5% to 10%, the industry ministry said on Monday regarding an implementation plan for 2025 to 2027. According to the plan, China will increase efforts in geological exploration and locating new gold resources while advancing technological and equipment issues associated with gold mining. The plan also called for deepening overseas investment cooperation, encouraging Chinese firms to sign long-term supply agreements with foreign mining companies to expand sources of primary mineral products including gold ore.
Monday’s Commitments of Traders Report showed managed money traders were net buyers of 6,775 contracts of gold for the week ending June 17, increasing their net long to 136,626.
Strong central bank purchasing of gold will remain favorable for gold’s upside, a recent survey by the World Gold Council (WGC) revealed that central banks globally anticipate an increase in gold holdings. Central banks across the globe added a net 12 tons of gold to their reserves in April, albeit at a slower rate of accumulation than in previous months. Global central banks are on pace to purchase 1,000 metric tons of gold in 2025, marking the fourth consecutive year of substantial buying. Central banks averaged a 400-500 metric ton rate of accumulation in the previous decade, marking a substantial increase in investment. Several African central banks—including those of Namibia, Rwanda, Uganda, and Madagascar—have recently announced plans to either initiate or expand their gold reserves.
SILVER
Silver futures are lower as traders absorb the developments in the Middle East which has weighed on silver’s safe-haven appeal. Alongside China’s plan to increase its gold resources, the country also announced it plans to increase its gold and silver output by more than 5% by 2027. China will promote gold and silver recycling from a range of waste products including electrical and electronic components, the plan said, signaling the heightened demand for silver regarding its use in key technologies.
For silver, managed money traders were net buyers of 1,240 contracts, increasing their net long to 50,034.
The long-term outlook for silver remains positive, driven by its essential role in semiconductors, solar panels, and other clean-energy technologies, sectors that continue to attract substantial global investment. That demand has remained robust despite broad headwinds faced in the last few months as a result of tariffs. Recent data highlights this trend, with China significantly increasing its wind and solar capacity in the first quarter of 2025, while solar power generation in Europe surged 30% year-over-year during the same period. Additionally, the structural supply-demand deficit remains favorable for silver.
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