Written Commentary
BASE METALS
Copper: Copper prices moved higher as traders looked past the developments in the Gulf as the metal found a small reprieve in a marginally weaker dollar. Benchmark three-month copper on the London Metal Exchange was up 1.9% at $13,410, while COMEX copper prices are up 2.35% at $6.25. Despite low inventories, the cash LME copper contract was trading at a $68 ton discount to the three-month forward Wednesday, suggesting no pressing need for near-term metal. Copper is likely to remain driven by broader macro sentiment. Before the outbreak of renewed strikes, copper had been trading in a narrow range as the market is still awaiting a possible decision from Washington over tariffs on refined copper as outflows from LME warehouses to the US continue. The Trump administration had originally set a June 30 deadline to announce potential tariffs on the metal. Still, tariff risk is still present and should not be discounted.
Zinc: Zinc gained 2.6% to $3,613. Recent disruptions have reinforced supply worries. Glencore’s smelter in Kazakhstan is operating at reduced capacity following an explosion, Nexa’s smelter in Peru is slowly restarting operations. Meanwhile, a seismic event at Boliden’s Garpenberg mine earlier this year has also raised the possibility of prolonged lower output. Inventories on the SHFE fell 2.2% from the previous week, highlighting tightening availability in the physical market.
Aluminum: Aluminum rose 1.2% to $3,168. Potential supply tightness worries continue amid the escalation in fighting and a potential shutdown of the Strait. The Guld region accounts for about 9% of global supply of aluminum. Meanwhile outflows from warehouses also continues to trigger supply worries.
Tin: Tin jumped 2.8% to $53,570.
Lead: Lead edged down 0.1% to $1,889.
Nickel: Nickel added 1.1% to $16,525.
PRECIOUS METALS
Gold: August gold recovered most of their losses from yesterday, trading near $4,130 as fighting in the Gulf continues, though traders largely look past a scenario of all-out war between the two sides. A weaker dollar and dip in short-term yields is also proving supportive of gold this morning. However, June’s Fed minutes revealed rising concerns over inflation, with some policymakers eyeing a case to raise rates. Inflation remained the dominant concern at the meeting, with total PCE running at 3.8% in April and staff-estimated at 4.1% in May. Notably, policymakers see price pressures as becoming increasingly broad-based across goods and services. The labor market was assessed as balanced and stable, leaving it largely a non-factor in the inflation debate. Ultimately, the minutes leave the impression of a committee on hold but tilting hawkish, with the next move dependent on incoming PCE prints and geopolitical developments. Markets are priced for a move higher in December and see a total of 38 bps of tightening by year-end. The geopolitical bid will remain in focus and gold’s direction will be dominated by Fed policy expectations. HSBC cut its 2026 average gold price forecast to $4,560 per ounce from $4,864, while reducing its 2027 forecast to $4,925 from $5,000. HSBC expects greater official sector demand for gold later in the year based on long-term diversification.
Silver: July Silver is up 2.6% to $59.69.
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