Written Commentary
PRECIOUS METALS
Gold: Gold prices edged lower as tensions between the US and Iran have appeared to ease, while data out of the US has been stronger-than-expected. However, the metal is still poised for a weekly gain after hitting a record-high on Wednesday. On the geopolitical front, people inside Iran, reached by Reuters on Wednesday and Thursday, said protests appeared to have abated. President Trump also softened warnings about striking Iran over its crackdown on civil unrest. There was also no Supreme Court ruling on President Trump’s tariffs, which dented some safe-haven demand although markets still remain cautious. Gold demand in India stayed muted this week as prices hit record highs again, taking the shine off retail buying, while bullion traded at a premium in China as demand remained steady ahead of the Lunar New Year.
Fed policy appears to remain set for the time being after December’s CPI pointed to moderating but still sticky inflation. Headline prices rose 0.3% on the month and 2.7% year over year, while core inflation increased 0.2% m/m and 2.6% y/y. Shelter and services, particularly rent, lodging, recreation, and medical care, remained the primary drivers, while declines in goods prices and gasoline helped cap broader inflation pressures. For the Fed, the absence of an upside surprise is likely welcome, but the report is unlikely to materially shift the policy outlook. Officials have recently emphasized that policy is well positioned as they wait to see how economic conditions evolve.
Silver: Silver futures slipped below $90 and are down 3.7%.
Platinum: Platinum 4% lower at $2,308.
BASE METALS
Copper: Copper prices fell to a one-week low as rising concerns over the demand picture in China have weighed on the metal. Additionally, concerns that copper could see a tariff placed on it were eased after President Trump said on Wednesday that he had opted for now against imposing tariffs on rare earths, lithium and other critical minerals. Copper has been added to the US critical minerals list. Benchmark three-month copper on the LME slid 1.68% to $12,885.
China’s 2025 new bank loans slumped to a seven-year low, highlighting weak borrowing needs amid a prolonged property downturn. Also, the country’s central bank on Thursday announced cuts to sector-specific interest rates to provide an early boost to the economy, but such a move tends to have a limited impact on growth. China’s economic growth is likely to slow to 4.5% in 2026 and maintain the same pace in 2027, per a poll of economists. Customs data released Wednesday showed China’s unwrought copper imports in 2025 fell to their lowest level since 2020, as elevated prices weighed on demand.
Copper’s rally has been fueled by supply disruptions, worries about deficits, and a strong flow of copper to the US ahead of potential tariffs, which has consequently tightened supply elsewhere. Available LME copper inventories, fell 22% to the lowest level in six months, LME data showed on Tuesday. That tightness is also appearing in the rising premium on LME cash copper over the three-month contract. The premium rose to $64 a ton on Tuesday for its highest in a month and up from $3 a week ago.
Strong projected growth in AI and defense is expected to materially lift global copper demand, exacerbating supply constraints over the coming years. While electric vehicles have driven demand over the past decade, AI, defense, and robotics are set to become even larger consumers of the metal over the next 14 years, alongside steady demand from appliances such as air conditioners. With limited new mine approvals and ongoing disruptions, production is unlikely to meaningfully increase in 2026, reinforcing expectations of sustained copper tightness and elevated prices.
Zinc: Zinc slipped 1.16%.
Aluminum: Aluminum shed 0.93%. 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 dropped 2.03%. Recent talk of a government clampdown on illegal tin mining in Indonesia have spurred supply worries. Tin has also gained support from market bets of rapid growth and demand for tin on the back of the artificial intelligence boom. However, Tom Langston at the International Tin Association said that the supply-demand metrics have not shifted, noting that fund interest for LME tin was at record levels.
Lead: Lead slid 0.88%.
Nickel: Nickel fell 3.31%. Major producer Indonesia may approve a nickel ore production quota of around 260 tons this year, lower than the estimated demand of around 340 million to 350 million tons, local media reported.
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