Written Commentary
COPPER
Copper futures edged higher in the overnight session, recovering some losses from Monday following an array of fresh tariff announcements from President Trump. Copper’s upside could be limited by worries over a global economic slowdown, hurting demand for base metals such as copper.
Washington’s ongoing investigation into potential new copper import tariffs is keeping the premium of COMEX copper futures over the LME benchmark elevated, COMEX copper stocks are at a seven-year high, up 120% since mid-February. Domestically, the abundance of copper in the US should keep markets well supplied and quell any supply worries.
Chile, the world’s largest copper producer, exported $4.67 billion of the metal in June, up 17.5% from the same month a year earlier, the central bank said on Monday.
The LME has imposed new restrictions on holders of large positions in nearby contracts amid low inventory levels. LME took action after premiums for nearby copper contracts jumped to their highest levels since October 2022. The restriction requires holders of long positions that are greater than the total stock levels to lend back to the market at a zero premium. Copper stocks in the LME-registered warehouses, currently at 97,400 tons, have edged up since the start of July, but are still down 64% since mid-February.
The premium for the LME’s cash copper contracts over the three-month forward is around $120. More than 30,000 metric tons of copper are expected to be delivered from China to LME-registered warehouses in July, per an LME-registered warehousing firm. Warehouses monitored by the Shanghai Futures Exchange (SHFE), showed copper inventories ticked up to 84,589 tons while CME copper stocks reached 221,456 tons.
GOLD
Gold prices slipped in the overnight session, pressured by a stronger dollar and higher Treasury yields as a result of President Trump’s newly announced tariffs on several US trading partners. Investors saw some optimism in the August 1 deadline extension, offering hope that more trade deals and lower tariffs could be negotiated. President Trump also threatened an additional 10% tariff on countries that align themselves with the BRICS group. China warned the Trump administration against reigniting trade tensions and threatened to retaliate against nations that strike deals with the US to exclude it from their supply chains. Negative news on the trade front is likely to add to golds upside as tariffs dampen countries economic outlooks and stir further uncertainty surrounding economic growth.
Strong central bank purchasing of gold will remain favorable for gold’s upside; a survey by the World Gold Council (WGC) last month revealed that central banks globally anticipate an increase in gold holdings. 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. Global central banks are on pace to purchase 1,000 metric tons of gold in 2025, marking the fourth consecutive year of substantial buying. Central banks averaged a 400-500 metric ton rate of accumulation in the previous decade, marking a substantial increase in investment. Several African central banks—including those of Namibia, Rwanda, Uganda, and Madagascar—have recently announced plans to either initiate or expand their gold reserves.
SILVER
Silver futures are little changed, as markets asses the latest developments in US trade policy and potential impact on industrial demand. President Donald Trump announced updated tariff rates on 14 countries that have not reached trade agreements with Washington, including major exporters such as Japan and South Korea, both of which will face 25% levies.
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.
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