Written Commentary
COPPER
July copper futures jumped nearly five percent, widening their premium over LME contracts, as rising speculation over a possible tariff on the metal comes as President Trump announced 50% tariffs on aluminum and steel. In February, President Trump ordered a probe into possible new tariffs on copper imports to rebuild US production of a metal critical to electric vehicles, military hardware, and semiconductors.
CME copper stocks rose to record highs of 180,501 tons on Friday, while US government data shows copper imports in March rose to more than 123,000 tons compared with around 58,000 tons in February and 76,000 in January. Stocks at the Shanghai Futures Exchange rose to 105,791 tons after falling to 98,671 tons a week earlier. The surge in imports comes as producers and traders seek to get the metal into the US before a possible tariff is implemented on the metal.
Recent PMI data showed that Asian factory activity slowed in May due to uncertainty over US tariffs and subdued demand, impacting new orders. Official PMI data for China showed an improvement in manufacturing activity in May, but the reading remained in contraction territory, showing the impact of lingering uncertainties.
Friday’s Commitments of Traders Report showed managed money traders were net sellers of 287 contracts of copper for the week ending May 27, reducing their net long to 21,693.
GOLD
Gold futures are sharply higher, with June contracts rising over two percent as investors seek safe-haven demand following the recent trade spat between the US and China. Both countries accused each other of undermining the 90-day truce they agreed to in Geneva. President Trump said on Friday he will double existing tariffs on steel and aluminum imports from 25% to 50%, effective June 4, as a legal battle continues in court as to the legality of the implementation of the tariffs. Dollar weakness also strengthened gold’s upside.
Gold’s near-term outlook remains volatile; future movements will mostly depend on the evolution of US trade policy and signals from the Fed on their path regarding monetary policy. On Sunday, Treasury Secretary Scott Bessent said President Trump would soon speak with Chinese President Xi Jinping to iron out a dispute over critical minerals. Long-term, strong central bank and investor demand remain in favor of gold’s upside.
Friday’s Commitments of Traders Report showed managed money traders were net sellers of 1,378 contracts of gold for the week ending May 27, reducing their net long to 117,237.
Fed Chairman Jerome Powell will speak at 12:00 p.m. central time today; markets will be closely watching his remarks following the recent trade developments for any indication of the future of monetary policy in the US. Markets are expecting 50 bps of easing this year, with the first rate cut coming at the September meeting. Rate cuts from the Fed would be supportive of gold, which benefits in a low-interest-rate environment.
SILVER
Silver futures are higher in overnight trade, benefiting from a weaker dollar and safe-haven demand as spot prices neared two-month highs.
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. Recent data highlights this trend, with China significantly increasing 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.
For silver, managed money traders were net buyers of 2,840 contracts, increasing their net long to 33,393.
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