Written Commentary
PRECIOUS METALS
Gold: December gold contracts were lower in a tight range overnight. While Treasury yields have fallen in response to the Fed’s decision to hold rates and today’s PCE data, lingering expectations of a move upwards in policy in December are acting as a headwind. Headline PCE rose 0.5% on the month, accelerating from 0.3% in August, while core prices increased 0.3% for a second consecutive month. Annual headline and core inflation were 3.6% and 3.1%, respectively. Those readings fundamentally preserve the case for further tightening, especially if underlying gauges continue to show upside trends. Meanwhile, Q3 GDP growth at a 3.4% annualized pace gives more reason to expect yields to move higher over the next 12 months. The Fed held on a 10–2 vote, with Cook and Hammack favoring a hike. Its stronger assessment of activity and continued inflation concern preserve a tightening bias, but Warsh’s confidence that inflation can fall without deliberately slowing growth encouraged markets to reduce expectations of increases in 2027. The policy implication is continued flexibility rather than an obvious change of course.
Silver: December contracts are down 2.7% to $52.190.
BASE METALS
Copper: LME copper was down 0.9% at $14,345, while US prices are down 1.66% to $6.5610. After hitting a two-week high on Wednesday, traders are taking profits and waiting out further big tech earnings as warehouse inventories rise on the LME. Still, supply remains tight in China, reflected by the Yangshan copper premium, which hit a 10-year high of $205 on Wednesday. As for the inventory dynamic, US warehouses continue to rise, currently sitting around 726,000 tons. However, there are dwindling expectations that the Trump administration will put levies on the metal, which could see inventory flow out of the US and into global warehouses. That would immediately reduce tightness in the system and lead to a pullback in copper.
Zinc: Zinc gained 0.4% to $3,879.
Aluminum: Aluminum fell 0.4% to $3,062.
Tin: Tin shed 0.5% to $50,450.
Lead: Lead rose 0.5% to $1,907.
Nickel: Nickel lost 0.5% to $15,520.
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