Written Commentary
PRECIOUS METALS
Gold: June COMEX contacts are up 0.6% overnight, as risk sentiment remains supported by the US and Iran’s outline agreement to extend their ceasefire. Both sides have agreed to a 60-day memorandum of understanding to extend the truce and open negotiations on Iran’s nuclear program, according to a Thursday report from Axios. The agreement still requires President Trump’s formal sign-off. Gold remains negatively correlated to oil, as such, lower oil prices should reduce the probability of rate hikes and support the metal.
Still, yesterday’s PCE data has reinforced the view that Fed policy is set to stand still for the time being, while a hawkish shift lingers among FOMC members and market participants. April’s headline PCE came in at +0.5% MoM and +3.9% YoY, while core landed in-line at +0.2% MoM and +3.3% YoY. The monthly core print of +0.2% is the softest reading in recent months (versus a run of +0.3%/+0.4% prints through Q1 2026), though it is premature to read this as a definitive cooling. On an annualized basis, the print is still well above the Fed’s 2% objective and should keep rate cuts out of the picture for the Fed. For gold, reduced geopolitical uncertainty will continue to direct risk-on flows away from the dollar, while lower oil prices should ease inflation fears. The larger macro environment remains challenging for gold as inflationary concerns remain present amid supply chain issues related to the conflict. However, gold looks modestly undervalued at current levels, with structural support expected to come from central bank purchasing amid lower prices.
Silver: Silver futures are down 0.2% to $75.79.
BASE METALS
Copper: Copper prices slipped as investors await further news regarding the US-Iran deal to extend a ceasefire as President Trump has yet to approve it and Iranian state media has said the deal is not yet finalized. Benchmark three-month copper on the London Metal Exchange dipped 0.3% to $13,655. LME copper had previously rebounded on Thursday on the initial news that the US and Iran reached an agreement to extend their ceasefire and open shipping through the Strait of Hormuz. Largely, it appears that profit taking is determining price direction for copper today. COMEX copper dipped 0.2% to $6.44, bringing the premium of COMEX over LME copper to $511 a ton. Tariff expectations continue to pull copper into the US, which tightens availability elsewhere, adding a layer of distortion to the market.
China’s central bank has instructed local banks to boost lending this month, reinforcing Beijing’s efforts to support its economy, which has been hurt by higher energy prices and weak domestic demand. The challenge for investors is balancing the potential of weaker demand for base metals against expectations of copper shortages due to mining issues and a lack of sulphuric acid.
Zinc: Zinc added 0.1% to $3,555.
Aluminum: Aluminum gained 0.7% to $3,684. The premium of the cash LME contract over the three-month forward climbed to $97 a ton, the highest since February 2007, as worries about shortages from the war fuel the bid.
Tin: Tin little changed at $55,100.
Lead: Lead rose 0.3% to $2,024. LME inventory data on Thursday showed inflows of nearly 30,000 tons of metal into warehouses in Taiwan.
Nickel: Nickel was little changed at $19,100.
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