Written Commentary
Precious Metals
Gold: Gold futures hit $4,000 an ounce for the first time as the government shutdown in the US, political uncertainty in France and Japan, and expected interest rate cuts from the Fed provide strong support to the yellow metal. Strong ETF demand also remains supportive of gold prices; global gold ETFs saw their third consecutive month of inflows in August per recent data from the World Gold Council. AUM by ETFs rose to their highest level since July 2022 and just 6% shy of record level. China’s central bank increased its gold holdings for an 11th straight month in September, while continued purchases by Kazakhstan, Turkey, Poland, and the Czech Republic also provide a solid floor for prices. Goldman Sachs on Monday raised its December 2026 price forecast to $4,900 an ounce from $4,300.
The government shutdown in the US appears to be continuing with little chance for a resolution in the near term after the Senate on Monday failed to pass funding bills for the fifth time. Consequently, economic data continues to be delayed, including September’s jobs report.
Markets are currently pricing a 92.5% chance of a 25 bps cut in October and an 79.7% chance of a following cut in December. Focus will shift to the Fed’s September meeting minutes out tomorrow. Investors will scrutinize opinions regarding the risks to employment and inflation and any signals on how interest rates will move at the Fed’s meeting later this month and in December.
Silver: Silver futures fell, breaking from gold, with December contracts falling nearly 0.6% to $48.175.
Platinum: Platinum futures slipped 0.5% to $1,626.
Base Metals
Copper: Copper prices rose despite a stronger dollar, as three-month copper on the LME rose 0.4% to $10,696 per ton, while US contracts were up 1.5% to $5.11 a pound. Operations at Freeport-McMoRan’s Grasberg mine in Indonesia remain suspended following a deadly mudslide, leaving lingering supply worries. Freeport-McMoRan slashed its 2026 sales guidance by 35% following the suspension. Freeport-McMoRan indicated that full production is unlikely to resume until early 2027. Disruptions at the Kamoa-Kakula mine in the Democratic Republic of Congo and Chile’s El Teniente mine are expected to remain. Chile’s copper output dropped almost 10% on a yearly basis in August. The copper market remains in a modest surplus, which is expected to be maintained in 2026 despite the recent mining disruptions. A stronger dollar today could limit copper’s upside.
Zinc: Zinc gained 0.6% to $3,025.
Aluminum: Aluminum shed 0.3% to $2,717.50. Aluminum rose toward $2,730 yesterday, testing three-year highs as lower supply worries pushed prices higher. Chinese authorities cut their annual output growth target for base metals to an average of 1.5% annually for 2025 and 2026, compared to the 5% target previously. The reduction in output was in line with the country’s output cap of 45 million tons, which is set to be breached this year under current capacity. In global warehouses, primary aluminum stocks dropped 55,000 tons in September to 415,000, although the levels rebounded from monthly lows.
Tin: Tin lost 0.7% to $36,550.
Lead: Lead added 0.1% to $2,007.
Nickel: Nickel slipped 0.1% to $15,470.
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