Written Commentary
PRECIOUS METALS
Gold: Gold prices are higher, with April contracts breaking above $5,000 following January’s inflation figures, which revealed pockets of sticky inflation amid a lower headline figure. Prices rose 0.2% month-over-month, while the annual rate eased to 2.4%. Core inflation held at 2.5% year-over-year. Energy and used vehicle deflation helped offset firmer services costs, particularly in transportation and medical care, leaving inflation cooling. Paired with the recent strength in labor data, the report supports a Federal Reserve stance of patience rather than urgency, keeping expectations centered on policy easing later in the summer rather than in the near term.
Precious metals saw heightened volatility on Thursday alongside weakness in equities, as broad-based liquidation across financial markets prompted investors to trim metal holdings to meet margin calls elsewhere. The decline came amid a drop in Treasury yields, signaling that the move was driven by liquidity stress and rapid position unwinding rather than rate repricing.
January’s US jobs data reduced the likelihood of a near-term Fed rate cut, with March easing expectations largely non-existent and June no longer fully priced in. Paired with the recent inflation data, markets continue to expect policy to remain on hold through the spring, limiting downside pressure on longer-term gold demand despite short-term rate pricing.
Structural support for gold remains intact as central banks continue to diversify reserves away from the dollar and increase bullion purchases, a trend expected to provide a steady underlying bid through 2026.
Silver: Silver futures are up 2.5% to $77.60. Silver is likely to continue to face volatility in both directions in the near term. The silver, platinum and palladium markets are small relative to gold, making them vulnerable to speculative inflows. This dynamic has presented the risk that prices have become detached from physical demand conditions. Additionally, record high prices could be poised to limit industrial demand.
Platinum: Platinum is up 2% to $2,058.
BASE METALS
Copper: Copper prices are lower, with benchmark three-month copper on the LME easing 0.4% to $12,820 after touching a one-week low as physical demand remains low ahead of the Lunar New Year and as at-large fundamentals remain unchanged. Volatility in LME copper has declined since the metal hit a record peak of $14,527 in late January, which was fueled by speculative buying. The price is still up 35% over the last six months.
LME copper stocks continue to rise, with inventories at 199,325 tons following an inflow of 7,225 tons overnight. LME inventories are up over 25% since January 9. Meanwhile, inventories at the SHFE climbed for the ninth-straight week to their highest level since April at 272,475 tons after months of waning supply. SHFE stocks are up 60% since December 19. Reports have been circulating that the Chinese State Reserves Bureau is releasing copper into warehouses to ease recent price spikes. COMEX stocks continue to see daily inflows and are at a record 590,525 tons.
Demand conditions have largely cooled after Chinese buyers completed their buying ahead of the Lunar New Year holiday. Analysts from Morgan Stanley said that China’s fourth-quarter copper consumption fell 12.3% year-over-year, despite a 4% rise in demand. Consumption data out of China will be on hold until March due to the Lunar New Year holiday, set to begin on February 15.
Zinc: Zinc dropped 1.5% to $3,324.
Aluminum: Aluminum gave up 2.4% to $3,027 after a report that the US may ease tariffs on some industrial metals, mainly steel and aluminum goods. Aluminum currently faces a 50% tariff as of June last year.
Tin: Tin gave up 2.2% to $48,595.
Lead: Lead fell 0.8% to $1,962.
Nickel: Nickel shed 2.6% to $16,970. Nickel jumped 2.2% on Wednesday after news that Indonesia sharply cut this year’s mining quota. French miner Eramet said its PT Weda Bay Nickel venture with China’s Tsingshan and Indonesia’s PT Antam had received an initial production allowance of 12 million wet metric tons for 2026, down from 32 million wet tons for 2025.
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