Written Commentary
BASE METALS
Copper: Copper prices are higher, with benchmark three-month copper on the LME up 1.3% to $12,257 as US-Iran news and firmer Chinese demand added to the bid. Increased Chinese demand was highlighted in inventory data, which showed stocks in SHFE-registered warehouses fell by 5.2% last week, first drop in inventory this year. The Yangshan copper premium, a gauge of China’s appetite for importing copper, surged by 33% to $69 a ton on Wednesday, the strongest since June last year. Stil, risks around the conflict remain as a headwind to prices given the uncertainty and potential impacts on demand and monetary policy.
LME copper warehouse stocks have climbed to over 355,000 tonnes, nearly double the late-January level. Broader exchange inventory overhang is above 1.25 million tonnes. The spread between the cash LME copper contract and the three-month forward was around $92 a ton on Tuesday.
Copper remains a market caught between structural bulls and cyclical sceptics. On one side, investors focused on grid build‑out, renewables and data‑center demand continue to view pullbacks as opportunities to maintain exposure to a constrained supply story. On the other, rising inventories, uneven Chinese property activity and slower factory growth in several major economies are encouraging macro funds to fade rallies and keep overall risk light.
Zinc: Zinc added 0.2% to $3,046.
Aluminum: Aluminum eased 0.7% to $3,236.
Tin: Tin rose 1% to $44,675.
Lead: Lead gained 0.8% to $1,907.
Nickel: Nickel advanced 3.1% to $17,475.
PRECIOUS METALS
Gold: Gold prices bounced higher following a drop in energy prices and the dollar amid reports that US officials sent a 15-point plant to Iran to end the war, which markets took as another sign of de-escalation. April COMEX contracts are up 3.3% to $4,546. Iran has seen the plan and sent back their own demands, the AP reported, citing officials from intermediary Pakistan. While Iran continued to launch strikes on Wednesday, the proposal news has tentatively raised risk appetite.
Tuesday’s S&P Global’s PMI survey showed surging price pressures across several nations as a result of higher energy prices and supply chain shocks due to the conflict. The longer supply chain disruptions and energy prices remain elevated, the more likely business will pass additional costs onto consumers in the face of the conflict. Unlike the dynamic of tariffs, which were partially absorbed by businesses, the increase in energy prices and other materials will be too much burden for business to face on top of existing temporary tariffs, making it likely those impacts will be felt by consumers. Markets are expecting the conflict in Iran to have sustained impact on prices as front-end inflation pricing remains firm, with one-year inflation swaps moving higher alongside energy, pointing to a market that is increasingly pricing near-term CPI upside risk.
Fed rate pricing is remains favorable to no policy action in 2026. However, the Fed is more likely to cut rates than to raise them given its dual mandate and the possibility of the bank looking through an energy price shock in an effort to support the labor market.
Gold is likely to continue to experience strong headwinds in the face of higher energy prices and risks that monetary policy could stay higher for longer. Like the equities, a sustained moved higher in gold will require material evidence of a de-escalation and a reopening of the Strait of Hormuz. Until then, inflation expectations will play an outsized role in the metal’s direction.
Still, ongoing geopolitical risks and central‑bank reserve diversification continue to underpin longer‑term demand for bullion as a macro hedge, suggesting that while the near‑term balance of risks is tilted toward volatility around US data and Fed‑speak, structural support from official‑sector buying and strategic investors remains in place on deeper dips.
Silver: Silver futures are up 5.4% to $73.36. Silver remains down meaningfully from its January highs, and the wide 52‑week range highlights the role of speculative participation.
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