Written Commentary
COPPER
May copper futures are higher, continuing their rebound. Copper futures advanced on Monday, building on last week’s momentum as investor confidence improved. The gains followed U.S. President Donald Trump’s move to exempt key technology products from recently imposed “reciprocal” tariffs, easing immediate trade tensions and boosting global risk assets. China’s Commerce Ministry welcomed the exemptions as a “small step,” but reiterated its call for the U.S. to lift the broader 145% tariffs on Chinese imports.
Markets are also watching closely as trade negotiations between the U.S. and major partners, including Japan, India, and South Korea, are set to take place this week. Adding to the bullish sentiment, copper prices found additional support from speculation that the U.S. might still implement metal-specific tariffs on national security grounds. This has widened the spread between U.S. copper futures and similar contracts on the London Metal Exchange, as possible trade restrictions raise concerns over the already strained copper smelting capacity in the U.S.
GOLD
June gold futures were higher in the overnight trade but came under pressure as there was some recovery in the U.S. dollar index. In addition, there was some flight to quality long liquidation following President Donald Trump’s decision to exempt smartphones, computers, and other electronics, mostly imported from China, from new tariffs. However, Commerce Secretary Howard Lutnick noted on Sunday that these items, along with semiconductors, could still face separate tariffs within the next month, adding fresh uncertainty to U.S. trade policy.
Last week, gold surged to a record high due to a wave of safe-haven buying, fueled by escalating tensions between the U.S. and China. After Trump raised tariffs on Chinese goods to 145%, Beijing responded by hiking duties on U.S. imports to 125%, effective Saturday.
Federal Reserve interest rate policies are likely to underpin the price of gold since the Federal Open Market Committee is predicted to lower its key interest rate by 25 basis points three times in 2025 with the first reduction likely at the June meeting.
SILVER
May silver futures are steady on Monday after last week’s price gains. Easing trade tensions dampened demand for safe-haven assets. There was some pressure on silver after U.S. President Donald Trump announced exemptions for key technology products from his new “reciprocal” tariffs, a move that boosted global market sentiment. China’s Commerce Ministry described the exemptions as a “small step” and urged the U.S. to fully eliminate the broader 145% tariff on Chinese imports.
Investors are now turning their attention to upcoming trade talks between the U.S. and major partners, including Japan, India and South Korea. Silver had previously jumped over 8.0% last week, fueled by increasing trade tensions and growing concerns about the U.S. economic outlook, which pushed investors toward alternative assets. Weaker-than-expected U.S. economic data last week also increased bets on further interest rate cuts by the Federal Reserve, adding fuel to silver’s recent surge.
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