Written Commentary
BASE METALS
Copper: Copper prices are higher, with benchmark three-month copper on the LME up 0.4% to $13,010, after dropping 3% over the past two sessions as worries over the conflict in the Middle East will undermine economic growth and demand for industrial metals.
China’s factory data was mixed, with the official PMI index tracking state-owned manufacturers coming in slightly weaker than expectations. The reading fell to 49.0 in February from 49.3 in January, a 4-month low and under forecasts for a reading of 49.1. Weak domestic demand pressured the figure despite a recovery in exports from private sector firms.
However, the RatingDog China General Manufacturing Purchasing Managers’ Index, compiled by S&P Global, rose to 52.1 in February from 50.3 previously. That topped analysts’ forecasts of 50.2, with new order volumes rising for the ninth successive month and at the quickest rate since December 2020. Averaging out both figures, the headline reading picked up from 49.8 to a five-month high of 50.5. The two surveys draw on different samples. The NBS focuses more on state-owned and large and medium-sized, domestic-facing enterprises, while the RatingDog poll profiles producers around Shanghai and in China’s southwestern provinces
US ISM manufacturing printed at 52.4, above forecasts and marking a second consecutive month of expansion, though slightly below January’s 52.6. Strength in new orders and production supported the headline figure, while employment and broader demand signals remained subdued.
Zinc: Zinc gained 1% to $3,302.
Aluminum: Aluminum prices hit their highest level in four years after Aluminum Bahrain (Alba) stopped shipments, deepening worries about the impact of the Middle East conflict on supplies. Aluminum was up 3.7% to $3,371. Alba declared force majeure on Wednesday, warning some customers of delays because it could not ship through the Strait of Hormuz. This follows the shutdown of Qatari smelter Qatalum, which produces 648,000 metric tons of aluminum per year. Qatar makes up roughly 1% of the EU’s aluminum imports. Still, the stoppage, which is expected to be completed by the end of March and could take six-to-twelve months to restart, has raised fears that other smelters in the region will stop producing. The Gulf Cooperation Council supplies roughly 8% of the world’s aluminum. Aluminum stocks in the LME-registered warehouses fell to 375,525 tons on Tuesday, the lowest level since September, after 45,325 tons of fresh cancellations in Malaysia’s Port Klang, daily LME data showed. Premiums, paid on top of LME prices for physical metal, have risen to $378 a ton for March and $428 for April, the highest levels in 3-1/2 years.
Tin: Tin jumped 5.2% to $51,375. Tin has recently been pressured by reports that Myanmar’s Wa region is taking steps towards the gradual restart of mining operations.
Lead: Lead rose 0.8% to $1,951.
Nickel: Nickel advanced 2.4% to $17,525. Indonesia’s nickel miners’ association said the government allotted a nickel ore output quota of 260 million tons for 2026. There will be an opportunity to propose a revision on the quota, it added.
PRECIOUS METALS
Gold: Gold prices are higher alongside a softer dollar, with April COMEX contracts rising 1.13% to $5,183. After several sessions of position unwinds and dollar strength, markets appear to be returning to a more typical risk-off posture, with silver also moving higher. The pause in the dollar rally and rise in Treasury yields has eased opportunity-cost pressures on precious metals, allowing safe-haven demand to re-emerge.
Gold prices drifted lower on Tuesday, as a stronger dollar and rising Treasury yields pressured the metal. The pullback was driven by a flight to liquidity, with investors raising cash amid heightened volatility tied to escalating Middle East tensions. Firming bond yields and a renewed inflation impulse from surging energy prices and a strong ISM manufacturing PMI reading have also pushed back rate-cut expectations, removing near-term policy support for bullion. A drawn-out Middle East conflict would heighten upside risks to inflation, potentially delaying Fed easing if higher energy costs begin to spill over into core price dynamics.
That said, the broader fundamental backdrop remains supportive. Persistent geopolitical tensions, central bank demand, and macro uncertainty continue to underpin structural demand for bullion, suggesting the recent pullback reflects position adjustment rather than a material shift in underlying fundamentals. Friday’s jobs report will be scrutinized for whether the data alters expectations for the policy path following a strong report for January.
Recent data supports a patient Federal Reserve stance. Headline and core PCE both rose 0.4% in December, lifting core inflation to 3.0% year-over-year, while unemployment remains low at 4.3%. The combination of sticky services inflation and a stable labor market reduces the urgency for near-term easing.
Silver: Silver futures are up 1.7% to $84.32
Platinum: Platinum is up 4.13% to $2,160.
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