Written Commentary
COPPER
May copper futures are higher and are approaching record highs due to concerns over U.S. tariffs and new stimulus measures in China. Last month, President Donald Trump signed an executive order to examine copper imports, citing national security risks growing dependence on foreign sources. This has sparked speculation that a 25% tariff could soon be imposed, causing traders to bid up premiums and rush shipments to the U.S., tightening supply in other regions.
Additionally, supply is limited by reduced investment in mining and lower refining capacity. At the same time, demand for copper is surging, driven by the rise of electric vehicles, advancements in AI and the transition to renewable energy. In China, the government’s 5.0% GDP growth target and new stimulus efforts to boost domestic consumption and support the economy are further fueling copper demand.
Currently, inventories on both the London and Shanghai exchanges are declining. President Donald Trump has recently threatened to impose tariffs on copper imports, which could further strain the already limited smelting capacity. Currently, the U.S. imports nearly half of its copper and depends on only two major smelters for domestic production.
GOLD
April gold futures are higher on Monday despite other flight to quality vehicles, such as the interest rate market futures, being liquidated in light of more encouraging news on the tariff situation. Traders hope the new U.S. tariffs scheduled to take effect on April 2 could be softer and more targeted than initially anticipated. President Donald Trump suggested on Friday that there could be “flexibility” in the plan, while weekend reports indicated that the tariffs may be narrower in scope, and could potentially spare some industries. However, some flight to quality support remains in light of escalating tensions in the Middle East.
Futures are also supported by ongoing central bank buying.
SILVER
May silver futures are higher, breaking a three-day losing streak as demand for safe-haven assets increased in light of geopolitical tensions and economic uncertainty in the US. Traders are keeping a close watch on U.S.-led efforts to resolve the Ukraine-Russia conflict, while violence in the Middle East has intensified.
Silver also benefited from a weakening U.S. dollar. In addition, investors are analyzing China’s economic outlook, as Premier Li Qiang called on countries to open their markets to combat global instability during the China Development Forum in Beijing on Sunday.
On the bullish side of the equation is the tightening supply situation. Over the past four years, silver supply has consistently fallen short of meeting demand. Industrial applications account for the majority of demand, making up approximately 60% of total silver consumption.
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