Copper Struggles for Direction

COPPER

Copper futures are lower following a volatile reaction to the news of President Trump’s firing of Fed Governor Lisa Cook. The US government has added copper, potash, and silicon to its draft list of critical minerals. The update, mandated every three years now, includes 54 minerals. Copper was included because of the severe economic consequences that supply disruptions could trigger, per the US Geological Survey.

Sales of new single-family homes in the US dipped slightly by 0.6% in July to an annualized rate of 652,000 units, still beating expectations of 630,000. Inventory also fell modestly, and the median price dropped 0.8% to $403,800. The data shows the housing market remains stagnant, with falling inventory and softening prices pointing to weak underlying demand and limited pricing power, reinforcing the view that the market is still struggling to gain momentum. Durable goods orders fell 2.8% in July, a better-than-expected reading and a recovery from June’s 9.3% drop in orders.

Chile’s mining regulator Sernageomin is raising its requirements for copper giant Codelco to restart areas of its flagship El Teniente mine after a deadly collapse. Codelco said on Monday it is working to gradually reopen the Andes Norte and Diamante sectors, after approvals from Sernageomin and the labor inspector’s office, but said its Recursos Norte and Andesita units remain closed. The state-run miner now expects 2025 production of 1.34-1.37 million metric tons of copper, down from a March estimate of 1.37-1.40 million tons, a trim of 30,000 tons on both ends. Elsewhere on the supply front, a US federal appeals court temporarily blocked a land transfer crucial for Rio Tinto and BHP to proceed with what could become one of the nation’s largest copper mines.

Traders are waiting for clues on demand prospects in the world’s biggest consumer of industrial metals, China, from surveys of purchasing managers in its manufacturing industry due Saturday evening.

SILVER

Silver futures are lower, continuing their slide from Monday. On the industrial side, recent data showed that China’s solar cell exports surged more than 70% in the first half of the year, driven by robust photovoltaic demand from India. This followed news that China installed over 93 gigawatts of solar capacity in May, a record high and a 300% year-on-year increase, ahead of policy changes that will make it more difficult to connect new panels to the grid.

On the supply side, global mine output has declined by 7% since 2016, contributing to an estimated shortfall of 800 million ounces between 2021 and 2025. Investor interest remains strong, with silver-backed exchange-traded products (ETPs) seeing net inflows of 95 million ounces in the first half of 2025. Since 2019, over 1.1 billion ounces have been drawn from mobile inventories.

Silver prices remain well-supported by a persistent structural supply deficit and robust investor demand. Industrial usage continues to expand, particularly in energy-related sectors such as solar power, electric vehicles, and electronics. Notably, solar applications accounted for 17% of total silver demand last year—three times their share from a decade ago.

GOLD

Gold futures are higher after President Trump said he was firing Fed Governor Lisa Cook, a move investors took as a hit to the central bank’s independence. The move is the biggest step yet in his effort to pressure the central bank and its authority on interest rates. Trump’s decision to remove Cook is poised to set up a clash over how much power the president has at the central bank. Cook said late Monday night that Trump has no authority to fire her and that she would continue in her job. The legal battle is likely to stir short-term volatility in the markets ahead of Friday’s PCE inflation data. Fed Chair Powell on Friday signaled a possible rate cut at the Fed’s meeting next month, saying that risks to the job market were rising but inflation remained a threat and that a decision wasn’t set in stone.

Markets are now pricing in an 84% chance of a quarter-point rate cut at the September policy meeting,  compared to nearly 90% after Powell’s comments on Friday. Friday’s data on July PCE inflation—the Fed’s preferred measure of inflation—will be the next key item of data ahead of the central bank’s September policy meeting. There is still a high degree of uncertainty when it comes to the interest rate path, and recent PMI and PPI data has shown significant indications that inflation could persist for the coming months and peak in the fall. A strong PCE reading could dampen expectations of a September cut and lead to a stronger dollar, pressuring gold.

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