Written Commentary
GOLD
Gold futures are lower, pressured by a stronger dollar and as market worries eased after President Trump said he did not plan to fire Fed Chair Jerome Powell. Trump indicated to Republican lawmakers that he is likely to attempt to remove Powell from his job soon but later rebuked the news, saying it was “highly unlikely” he would fire Powell. Gold was also pressured by weekly jobless claims data, which came in below expectations, with 221,000 new claims, lower than the previous week’s 228,000 and below the expected figure of 233,000. US-China tensions also cooled with the lifting of the AI chip ban and a new trade deal with Indonesia, easing trade concerns and dampening gold’s safe-haven appeal.
Wednesday’s PPI inflation data saw no change in producer prices in June. Final demand goods prices rose 0.3%, the largest increase since February, with the jump in sector prices attributed to core goods, which are more sensitive to tariffs. The reading follows Tuesday’s data which saw CPI inflation in June rise 0.3% in June after rising 0.1% in May, while annualized inflation ticked up to 2.7% on an annualized basis. The readings largely reinforce the Fed’s views that prices would rise later in the summer as the effects of tariffs make their way into the economy.
A World Gold Council report outlined that if current macro conditions hold, gold will likely move sideways with some possible upside. However, macro conditions rarely move in line with consensus forecasts. Should economic and financial conditions worsen and exacerbate stagflationary pressures, safe haven demand could increase and push gold 10%-15% higher.
Strong central bank demand continues to support gold prices, with a recent World Gold Council survey showing global central banks expect to increase their gold holdings. In 2025, central banks are on track to buy 1,000 metric tons—well above the previous decade’s average of 400–500 tons—with several African nations like Namibia, Rwanda, Uganda, and Madagascar planning to expand their reserves.
SILVER
Silver futures are lower following moves in gold as a stronger dollar pressured both the metals lower.
The long-term outlook for silver remains positive, driven by its essential role in semiconductors, solar panels, and other clean-energy technologies, sectors that continue to attract substantial global investment. That demand has remained robust despite broad headwinds faced in the last few months as a result of tariffs. South Korea’s exports rebounded in June largely on brisk semiconductor shipments, indicating the importance of and demand for the technology, despite challenges from higher US tariffs weighing on global trade. Recent data highlights this trend: China significantly increased its wind and solar capacity in the first quarter of 2025, while solar power generation in Europe surged 30% year-over-year during the same period. Additionally, the structural supply-demand deficit remains favorable for silver, with the market expected to remain in a deficit for the fifth straight year.
COPPER
Copper prices continued lower on Thursday, as the dollar strengthened, and as warehouses outside the US reported higher copper inventories. Copper previously scheduled to the US has been getting redirected after President Trump announced a 50% tariff on the metal beginning August 1. Copper prices outside the US could be weighed down near-term as large copper producers look to shift supplies elsewhere. Global copper traders are offering cargoes to Chinese buyers as they look to offload metal no longer able to reach the US before the copper tariff deadline. China is the world’s largest copper consumer, and the number of offers by overseas sellers has been picking up since late June and is now the highest in months, per a Chinese copper trader.
Data out of China showed GDP growth met forecasts. China’s GDP grew 5.2% during April-June, slightly lower than the 5.4% in the first quarter, with first-half 2025 GDP growth at 5.3%. Fixed asset investment increased 2.8% year-on-year, according to China’s National Bureau of Statistics. Traders are turning their attention to how China will deal with overcapacity in its industrial sectors for further guidance on copper demand in the world’s largest copper consumer.
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