Written Commentary
PRECIOUS METALS
Gold: June COMEX contracts held relatively steady (down 0.20% to $4,701), as attention centers around the US-China summit in Beijing. Meanwhile, inflation concerns continue to weigh on Fed easing prospects, reinforcing a challenging macro-environment for gold. April’s PPI and CPI reports saw increasing inflationary pressures on both consumers and producers leaving traders to price out any move downwards from the Fed.
Optimism that a US-Iran resolution would take place soon has waned and President Trump called Iran’s counteroffer a “piece of garbage.” Those dynamics are likely to favor higher yields and a stronger dollar, while also reinforcing the Fed’s current stance. Still, any credible news regarding a reopening of the Strait is likely to pressure inflation concerns and lift gold, though that scenario does not seem probable in the near future. Elsewhere, India raised tariffs on gold and silver to 15% from 6%, in an effort to ease pressure on its foreign exchange reserves. India is the world’s second-largest consumer of precious metals.
Silver: Silver futures are down 3.5% to $86.23. Silver has been silver outperforming gold recently. Silver reached its highest level since March 10th, while gold has been stuck in sideways consolidation. Driving silver is the gold/silver ratio compressing to 53.96, the lowest since late January and the narrowest in modern trading history, making silver relatively cheap. HSBC raised its silver price forecast from $68.25 to $75.00 citing ongoing supply tightness.
BASE METALS
Copper: Copper prices on the LME took a breather, with benchmark three-month copper on the London Metal Exchange down 0.9% to $14,030. Higher prices had seemingly dented appetite in China. Still, supply risks persist, pointing to today’s move downwards as more of a consolidation move than any sort of change in sentiment. Chile’s Q1 2026 copper production hit a nine-year low, down 6% year-over-year to just 1.22 million tons; Chile represents 25% of global supply. Production declines were concentrated at the world’s largest mines, suggesting the Grasberg-related problems are not isolated. On the demand side, strong Indian spot demand has been reported nearly every day for two weeks, and improving Chinese demand expectations are also supporting prices. Future demand expectations, largely thanks to recent strong factory activity and expectations of AI infrastructure buildout, have eased concerns over immediate effects on global economies from higher energy prices. Meanwhile, continued worries over sulphuric acid shortages affecting copper producers also remains supportive of prices. Still, fading hopes of a peace deal in the near future between the US and Iran would otherwise create a challenging environment for copper, as elevated energy prices could dampen economic growth and demand for the metal.
US copper futures are down 1% to $6.60. Speculation of further tariffs on US copper later in the year have supported arbitrage and defensive purchasing to the US. COMEX copper is trading at a premium of about $500 a ton over LME prices. The Trump administration expected to decide in July whether to impose tariffs on refined copper. This has also partly insulated it from some global risk-off pressures in recent weeks. COMEX inventories have climbed to successive record highs, having more than doubled over the past eight months. As for the broader copper complex, increased risk sentiment will prove supportive of prices, while a formal peace agreement is likely to see investors adopt pre-war themes.
Zinc: Zinc was up 2.5% at $3,615. Zinc prices moved to their highest level in nearly four years following an incident at Nexa Resources Cajamarquilla zinc smelter in Peru, which has heightened supply worries. The smelter is responsible for producing around 344,400 tons of zinc per year and is the largest in Latin America. Supply worries have been a theme in the market for some time, with the International Lead and Zinc Study Group previously announcing there to be a 19,000 ton deficit this year.
Aluminum: Aluminum edged up 0.4% to $3,665.
Tin: Tin slipped 0.5% to $55,750.
Lead: Lead added 0.1% to $2,011.
Nickel: Nickel shed 0.7% to $19,050. Reuters reported that Chinese companies operating in Indonesia warned that tighter ore quotas and local tax hikes threaten investment.
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