Copper Slips Ahead of US-China Meeting

COPPER

Copper futures fell as physical buyers paused ahead of potential news of a trade deal with the EU and an extension in a trade truce with China. Treasury Secretary Scott Bessent said he would soon meet top Chinese officials to extend the two countries’ trade truce, saying he expects the two economic powerhouses to work together on issues like manufacturing and oil. Chinese and US officials are set to meet in Stockholm next week.

Chile’s mining minister and the chairman of Codelco, the world’s biggest copper producer, said that they have not received details on the 50% copper tariff and which copper products will be included, due to be imposed by the US on August 1.

Durable goods orders fell less than expected, with a -9.3% fall in orders in June compared to expectations of a -10.4% decline. Core durable goods orders grew 0.2%, beating expectations of 0.1%, while goods orders excluding defense fell -9.4%. New home sales increased 0.6% to a seasonally adjusted annualized rate of 627,000 units in June, a third report from the Commerce Department’s Census Bureau showed. That was below economists’ expectations for a rise to a rate of 650,000 units. Sales fell -6.6% on a year-over-year basis in June. The inventory of unsold homes on the market increased to 511,000 units, the highest level since October 2007, from 505,000 in May.

Gains in copper could be limited over concerns of surpluses in the market. The global refined copper market showed a 97,000 metric ton surplus in May, compared with an 80,000 metric ton deficit in April, the International Copper Study Group (ICSG) said in its latest monthly bulletin. For the first 5 months of the year, the market was in a 272,000 metric ton surplus compared with a 273,000 metric ton surplus in the same period a year earlier, the ICSG said. The US is expected to begin using up the stockpile of copper it built ahead of the tariff announcement before importing from abroad, which could make demand look a bit weaker for that period of inventory rundown.

SILVER

Silver futures fell lower but are still on track to finish the week higher after hitting their highest level in 14 years on Wednesday, aided by growing investor interest in alternatives to gold. Silver, both a precious and industrial metal, is up 36% this year, outperforming gold’s 31% growth and coming close to the key $40-per-ounce mark. Silver’s supply-demand fundamentals also remain favorable as the market is expected to remain in a deficit for the fifth straight year. Silver’s recent rally has improved its ratio with gold to the strongest level in seven months. It currently takes 87 ounces of silver to buy an ounce of gold, compared to 105 ounces in April.

Silver has found support from China in recent days, after the industry ministry pledged to stabilize growth in key sectors such as machinery, autos, and electrical equipment. The initiative aims to modernize production and is expected to boost demand for metals. The action plan also covers 10 major industries, including steel, nonferrous metals, petrochemicals, and construction materials.

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.

GOLD

Gold futures extended losses, pressured by a stronger dollar as progress in trade talks between the US and EU sparked an increase in risk appetite. Solid US economic data also weighed on gold. The market is optimistic over trade deals strong equities growth and low volatility as well have weighed on gold’s upside.

Elevated inflation expectations and strong economic data have weighed on expectations over the number of Fed rate cuts this year. Jobless claims fell to a three-month low, while S&P Composite PMI data signaled an expanding private sector, strengthening the dollar and weighing on gold. Additionally, businesses in the S&P report said rising wage costs and tariffs contributed to steeper input price inflation, which firms increasingly passed on to customers, resulting in output inflation accelerating. The inflationary print from the report underscored the Fed’s wait-and-see stance. The Fed’s policy meeting, scheduled for July 29-30, is expected to maintain interest rates within their current range.

Strong central bank demand will continue to support gold prices. A recent World Gold Council survey showed global central banks expect to increase their gold holdings and are on track to buy 1,000 metric tons of gold in 2025, well above the previous decade’s average of 400–500 tons. Several African nations, like Namibia, Rwanda, Uganda, and Madagascar, have also announced plans to expand their gold reserves.

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