Written Commentary
PRECIOUS METALS
Gold: Gold prices hit all-time highs on Monday as concerns over Federal Reserve independence ramped up again following news that the Trump Administration threatened Fed Chair Powell with a criminal indictment over the weekend. The bank released a video Sunday night, with Chair Powell accusing the administration of using the threat of criminal prosecution to pressure the central bank into lowering rates. Powell framed the move from the Justice Department as a head-on challenge to the central bank’s independence. Powell made clear by releasing the video that the situation would be well in the public spotlight. A criminal investigation of a sitting chair is without precedent. The news triggered a sell-off in American assets.
Meanwhile, geopolitical tensions in Iran were higher following recent protests against the regime. Iran’s parliament speaker warned the US and Israel against any intervention after President Trump threatened military action against the government amid widespread protests in Iran that have reportedly killed hundreds of people.
December’s labor report, which saw the economy add 50,000 jobs in December and the unemployment rate edge down from 4.5% to 4.4%, signaled a stable labor market. Albeit one with lower hiring. Employment continued to trend up in healthcare and social assistance. Rate cut odds for a January cut are just 5% and expectations of future easing have been shifted farther back into the year. However, markets are still pricing in a cut from the Fed in June.
The Supreme Court’s ruling on Trump’s tariffs could potentially come this week after the Supreme Court did not rule on the issue on Friday. Prediction markets are placing an unfavorable outcome for the Trump administration. The central question is whether or not the IEEPA grants the President the legals means and authority to impose tariffs.
Silver: Silver future are up over 6% to $84.36 as concerns over Fed independence trigger a safe-haven rally for precious metals.
Platinum: Platinum is up 1.8% to $2,335. The metal is finding support from safe-haven demand and a recent pivot by the European Union on its 2035 combustion-engine ban, a tight supply backdrop, and rising investment demand. Platinum and palladium are both used in cars to reduce exhaust emissions. The EU’s extension regarding the delay of its engine ban is indefinite and will also require stricter emission standards, which could require higher platinum and palladium contents in exhaust systems.
BASE METALS
Copper: Copper prices rose to start the week as attention shifted to China amid optimism regarding demand prospects in the country. Benchmark three-month copper on the LME was up 1.9% to $13,240, after hitting a record high of $13,387.50 earlier last week. China is reportedly set to roll out a package of fiscal policies to boost demand and ensure the economy gets off to a good start. Policymakers have pledged to step up support to ensure the economy gets off to a solid start in 2026. The cabinet, chaired by Premier Li Qiang, said the government will boost household consumption by strengthening loan support for services providers, enhancing interest‑subsidy policies for personal consumer loans, and expanding the supply of high‑quality services. Markets will be watching China’s latest trade data due Wednesday.
Projected growth in the AI and defense sectors is set to boost global copper demand, while supplies are expected to fall short over the coming years. While the electric vehicle industry has lifted copper demand the past decade, the AI, defense and robotics industries will require even more of the metal during the next 14 years alongside traditional consumer appetite for air conditioners and other copper-hungry appliances. Expectations of shortages over coming years due to lack of new supplies will help keep copper prices elevated. Mine production is not expected to pick up much in 2026 given limited project approvals alongside current disruptions. Mine disruptions, including an accident at Freeport-McMoRan’s Grasberg mine in Indonesia in September and a strike at Capstone Copper’s Mantoverde copper and gold mine in northern Chile, have reinforced the theme of shortages.
Zinc: Zinc added 1.2% to $3,177.
Aluminum: Aluminum rose 1.3% to $3,177. Aluminum has found recent support following the shutdown of the Mozal smelter in Mozambique. Supply constraints have also been strained from the EU’s new carbon tax, which consequently has reduced the flow of the metal into the trade bloc. Additionally, China announced a 45 million-ton output cap, which has fueled some supply shortage concerns.
Tin: Tin jumped 5.5% to $48,050. Recent talk of a government clampdown on illegal tin mining in Indonesia have spurred supply worries.
Lead: Lead firmed 0.7% to $2,064.
Nickel: Nickel climbed 2.4% to $18,125. The Indonesian government refrained from disclosing its 2026 mining output quota, snapping a sharp rally that had sent the metal to its highest since mid-2024 on Wednesday at $18,800. LME nickel stocks climbed to 276,300 tons, the highest since June 2018, after 20,760 tons of inflows. Meanwhile, the discount of the cash LME nickel contract over the three-month forward widened to $224 a ton on Wednesday, implying no pressing need for near-term metal.
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