Written Commentary
COPPER
March copper futures are higher and are trading at the highest level since November 11 and are on track to post a weekly gain of over 6%. This marks the best performance since May of last year. The positive momentum was largely driven by optimism that China, which is the world’s largest copper consumer, will follow through on its recent pledges to increase monetary and fiscal stimulus to boost economic growth.
Additionally, expectations of strong demand for electric vehicles and renewable energy technologies were seen as catalysts for higher copper consumption this year. However, rising global trade tensions and the potential impact of tariffs under the incoming US administration, led by President Donald Trump, kept investors cautious.
GOLD
February gold futures are sharply higher marking the fourth consecutive session of gains and positioning the metal for its strongest week since mid-November. The yellow metal is higher despite the bearish interest rate implications of this morning’s U.S. employment report.
Earlier this week, the World Gold Council reported that physically-backed gold ETFs saw their first inflows in four years, fueled by strong demand in Asia. North American funds recorded their first annual inflow since 2020, while European outflows were smaller compared to 2023.
In the longer term view, the precious metal remains supported by persistent geopolitical tensions and expectations of continued central bank buying.
SILVER
March silver futures are higher continuing its advance for the seventh consecutive session and are trading at the highest level since December 12. Prices are higher despite the increasing probabilities that the Federal Open Market Committee will be slow to add to accommodation this year.
The Fed’s uncertainty about inflation and the potential tariffs under President-elect Trump’s administration have kept market participants wary, strengthening demand for silver as a safe-haven asset. Additionally, strong industrial demand, driven by silver’s role in renewable energy technologies and electronics, has further supported its value.
In addition, ongoing geopolitical tensions and economic policy uncertainties have fueled market volatility, prompting investors to turn to precious metals like silver for stability.
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