Written Commentary
GOLD
Gold futures are lower on a stronger dollar after Thursday’s labor data dulled any bets of a Fed rate cut in July while investors await details on the trade front ahead of the July 9 deadline. President Trump said Sunday that a dozen or more letters could go out this week and that letters will be delivered starting at noon Monday. President Trump also threatened an additional 10% tariff on countries that align themselves with the BRICS group. Treasury Secretary Scott Bessent said that the tone of the letters sent out might not be a declaration of immediate tariffs; instead, the letters will feature another deadline that trading partners will have to meet to reach a deal with the US.
Strong central bank purchasing of gold will remain favorable for gold’s upside; a survey by the World Gold Council (WGC) last month 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.
COPPER
Copper futures are lower ahead of the July 9 deadline for tariffs, with the rates set to take effect on August 1. President Trump also said any countries aligning with the “anti-American” policies of the BRICS group of developing nations would face an additional 10% tariff. Markets are worried that President Trump’s trade policies could trigger a global economic slowdown, hurting demand for base metals such as copper. Washington’s ongoing investigation into potential new copper import tariffs is keeping the premium of COMEX copper futures over the LME benchmark elevated, COMEX copper stocks are at a seven-year high, up 120% since mid-February. Domestically, the abundance of copper in the US should keep markets well supplied and quell any supply worries.
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 that are greater than the total stock levels to lend back to the market at a zero premium. Copper stocks in the LME-registered warehouses, currently at 97,400 tons, have edged up since the start of July, but are still down 64% since mid-February.
The premium for the LME’s cash copper contracts over the three-month forward is around $120. More than 30,000 metric tons of copper are expected to be delivered from China to LME-registered warehouses in July, per an LME-registered warehousing firm. Warehouses monitored by the Shanghai Futures Exchange (SHFE), showed copper inventories ticked up to 84,589 tons while CME copper stocks reached 220,954 tons.
SILVER
Silver futures are lower, pulling back from 13-year highs as markets await greater clarity on the trade front and the impact tariffs will have on safe haven and industrial demand.
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. South Korea’s exports rebounded in June largely on brisk semiconductor shipments, indicating the importance of and demand for the technology, despite challenges from higher US tariffs weighing on global trade. Recent data highlights this trend: China significantly increased 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, with the market expected to remain in a deficit for the fifth straight year.
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