Written Commentary
COPPER
Futures continue higher, up nearly 3.5%, bringing the premium over LME copper to over $1,300 a ton, as bullish sentiment has been driven by supply-side disruptions and escalating trade tensions. Prolonged production delays at Teck Resources’ Chilean operations are expected to persist for several months, while mining activities at the Kamoa-Kakula project in the Democratic Republic of Congo have also been interrupted.
Speculation over a potential tariff on copper continues to provide upward support for the metal. 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. President Trump announced 50% tariffs on aluminum and steel last weekend, adding to speculation that copper will receive a similar fate.
Factory orders dropped sharply in April as the boost from front-loading of purchases ahead of tariffs faded. Data from the Commerce Department’s Census Bureau showed a -3.7% fall after an unrevised +3.4% jump in March. The government also reported that orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, decreased -1.5% in April rather than -1.3% as estimated last month. Shipments of these so-called core capital goods fell by an unrevised 0.1%.
Peru’s Energy and Mines Minister Jorge Montero said he expects mining investment for the world’s third-largest copper producer to reach $4.8 billion this year and for copper output to reach 2.8 million metric tons. Last year, Peru produced roughly 2.7 million tons of copper.
GOLD
Gold futures are higher as investors await Friday’s non-farm payroll data for further clarity on the labor market and the Fed’s potential interest rate path. Weekly initial jobless claims data showed an uptick in unemployment claims. Weekly unemployment claims were 247,000, a rise over last week’s 239,000 and higher than expectations of 236,000.
August contracts advanced over 0.8% Wednesday on a softer dollar and weak labor and services data. ADP nonfarm payroll employment change data showed only 37,000 new hires for the month of May, sharply lower than expectations of 110,000 and below last month’s reading of 60,000. ISM non-manufacturing PMI dropped to 49.9 last month, showing a contraction in services activity, a sector that makes up two-thirds of the US economy.
Official nonfarm payroll data will be released Friday at 7:30 a.m. CT; economists are expecting a reading of 127,000 for May. Friday’s report will offer clues on the Fed’s future monetary policy; a slowing labor market will add to the probability of a Fed rate cut, which would be supportive of gold prices. However, strong labor data will reinforce the Fed’s wait-and-see approach to monetary policy while the larger inflation picture plays out. Markets are expecting 50 bps of easing this year from the Fed, with the first rate cut coming at the September meeting.
Central banks across the globe added a net 12 tons of gold to their reserves in April, albeit at a slower rate of accumulation than in previous months. Several African central banks—including those of Namibia, Rwanda, Uganda, and Madagascar—have recently announced plans to either initiate or expand their gold reserves.
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. Long-term, strong central bank and investor demand remain in favor of gold’s upside.
SILVER
Silver futures soared over $36 per ounce on Thursday, marking their highest level since February 2012. The rally, driven by the weak ADP nonfarm payroll data and bets on a dovish outlook from the Fed, boosted safe-haven demand ahead of Friday’s nonfarm payrolls report. Expectations for a Fed rate cut in September have grown stronger following a series of disappointing economic indicators.
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.
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