Written Commentary
BASE METALS
Copper: Copper prices slipped as a wave of profit-taking took ahold of the metal, while updates to SHFE margin requirements dented demand. Benchmark three-month copper on the LME declined 0.68% to $13,109. The SHFE stepped into the market on Monday to increase margin requirements and widen price limits for copper and aluminum, with the adjustments effective January 28. The Shanghai exchange is increasingly making regulatory changes in 2026. On Monday, the SHFE curbed trading for several clients for failing to disclose common control of trading accounts, while adjusting trading limits for both metals.
Concerns regarding supply disruptions over the past 12 months continue to provide underlying support for prices as forecasts of soaring AI datacenter growth points to elevated long-term demand. Demand prospects from China are also in focus in light of the country’s economic growth plans after a surge in investment was announced by the state grid earlier this month. China’s state grid said that it would spend four trillion yuan ($574 billion) to upgrade the country’s power grid between 2026 and 2030.
This week will also bring China’s latest industrial profit data for December as the country battles fierce competition, which has kept prices ultra-low and prompted attention from authorities. Forecasts are generally expecting industrial profits to have improved across most sectors amid a modest pickup in growth in the second half of 2025.
Zinc: Zinc shed 0.25%.
Aluminum: Aluminum dropped 0.47%.
Tin: Tin rebounded 4.09% to $56,450. Focus is on the SHFE, which imposed position restrictions on multiple clients for failing to disclose details relating to control over trading accounts.
Lead: Lead dipped 0.07%.
Nickel: Nickel declined 0.17%.
PRECIOUS METALS
Gold: Gold prices slipped overnight, with April COMEX contracts hovering around $5,100. Uncertainty around President Trump’s policymaking has been driving safe-haven demand and lead to record prices in both gold and silver. Gold prices are likely to continue to remain supported by geopolitical and economic uncertainty. Central bank demand also remains supportive of gold as banks across the globe as they look to reduce foreign exchange holdings and reduce reliance on the US dollar. President Trump threatened South Korea with a 25% tariff on autos and other goods late Monday. The move comes after the president threatened Canada with a 100% tariff over the weekend if the country followed through on its trade deal with China.
Economic data this week could help shape future policy expectations from the Fed. Still, the bank is expected to hold steady on rates when it announces its policy decision on Wednesday. However, inflation and labor data are likely to continue to serve as the main guideposts on policy.
Central bank buying and a broader move away from the dollar have remained supportive of gold prices and is set to continue to provide structural support for the metal throughout 2026. Data showed that China extended its gold buying streak in December, marking the fourteenth consecutive month of central bank purchasing from the country. China’s gold holdings rose to 74.15 million fine troy ounces at the end of December, from 74.12 million in the previous month. The value of China’s gold reserves increased to $319.45 billion at the end of last month, from $310.65 billion a month earlier, according to the PBOC.
Investor flows into physically back exchange-traded funds also remain supportive as retail investors seek out safe-haven assets alongside institutional buyers
Silver: Silver futures are down 5.15% but remained above the $100 level. Silver is benefitting from safe-haven flows and a structural supply-demand deficit thanks to its role in various technologies. Silver has also seen intense retail demand, with major silver ETFs seeing record volume in recent days as traders supported momentum-driven buying, adding to tightness in physical markets. However, record high prices could be poised to limit industrial demand.
Platinum: Platinum is 9% lower at $2,623.
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