Dollar, Iran, and Fed Expectations Weigh on Metals

PRECIOUS METALS

Gold: Gold prices are sharply lower, pressured by a stronger dollar and higher yields following a hotter-than-expected PPI reading, which saw producer prices rise 0.7% MoM in February, above 0.5% in January and much higher than forecasts of 0.3%. Core PPI increased 0.5%, after a 0.8% rise in January but above forecasts of 0.3%. On an annual basis, headline producer inflation jumped to 3.4%, the highest in a year, compared to 2.9% in January and forecasts it would remain at 2.9%. Core producer inflation also jumped to 3.9%.

DXY is holding around 99.6–99.8 after gaining ground on elevated oil prices tied to the ongoing Iran conflict — and a modest tick higher in real yields. The 10-year TIPS yield stood at 1.82% as of Tuesday’s close, matching the start to last week and restoring some headwind for a zero-yielding asset.

The immediate overhang is today’s FOMC decision, where the committee is universally expected to hold rates at 3.50–3.75%. Futures markets continue to back the rate-cut pricing. Markets are not seeing any fully priced moves until June 2027 at the earliest, with some desks floating the idea of a hike to combat oil-shock inflation that could reach 3.5% by summer.

Chair Powell’s press conference will be dissected for any shift in the “higher-for-longer” narrative, updated dot-plot projections, and the Fed’s characterization of energy-driven price pressures versus underlying demand. On the flow side, GLD pulled in $3.72 billion in the week ending March 3, a pace that reflects persistent institutional hedging demand amid Middle East uncertainty, even as the spot price has corrected roughly 10% from the January all-time high of $5,589.

Energy markets remain the primary driver of sentiment. The conflict in Iran presents upside risks to inflation, which has prompted fears that world central banks could turn hawkish into the year. This dynamic, alongside a rising dollar, has pressured precious metals prices in recent weeks. Other central banks including the European Central Bank, the Bank of England and the Bank of Japan will also meet this week, with the focus on policymakers’ assessment of the Iran war on inflation, growth and future policies.

Silver: Silver futures are 4.50% lower to $76.54. The gold-silver ratio has widened back above 62, underscoring silver’s dual nature: safe-haven bids are rotating cash, while silver’s industrial demand component is being discounted against uncertain global manufacturing momentum.

Platinum: Platinum is up 2.80 % to $2,153.

BASE METALS

Copper: Copper prices are lower with the LME base metals complex mostly softer, caught between better-than-expected Chinese data, macro headwinds from the Iran conflict, rising warehouse inventories, and dollar strength. Benchmark three-month copper on the LME down 0.77% to $12,757 was down 0.6% to $12,694 after hitting $12,635, the lowest since March 9.

Copper stocks in LME warehouses are at 334,100 tons, their highest since August 2019, with 3,775 tons of inflows to the LME-registered warehouses in the US, LME daily data showed. With plenty of metal available for the nearby supply, the discount of the LME cash copper contract against the three-month contract closed on Tuesday at $113.5 a ton, its highest level in 13 months. While long-term electrification narratives underpin a constructive structural view, the near-term inventory overhang is capping rallies.

China’s January–February industrial production rose 6.3% year-on-year, beating the 5.0% consensus and accelerating from December’s 5.2% pace; retail sales gained 2.8% (vs. 2.5% expected), and fixed-asset investment surprised at +1.8% against forecasts of –2.1%.Property investment, while still deeply negative at -11%, showed moderation from 2025’s –17.2% full-year figure. The data paints a picture of a manufacturing sector holding up better than feared, though the absence of aggressive new stimulus and a reduced 4.5–5.0% GDP target temper bullish conviction. Other data out of China showed that copper exports nearly doubled during the January-February period from a year earlier. Exports of unwrought copper and copper products surged 95.5% in the first two months of 2026 from the same period a year earlier to 343,624 metric tons. Higher international prices and favorable arbitrage opportunities supported export growth.

Meanwhile, central bank decisions are in focus as inflation risks have skewed to the upside, while concerns that higher energy prices will hurt economic growth dent sentiment. The Reserve Bank of Australia raised rates for a second straight month, warning about inflation risks from the Middle East war, while the Fed, European Central Bank, Bank of England, and Bank of Japan are all expected to keep rates steady and highlight upside risks to inflation.

Zinc: Zinc dropped 1.9% to $3,165 after touching $3,130, its two-month low.

Aluminum: Aluminum dropped 0.6% to $3,379. Emirates Global Aluminum (EGA) secured alternative export routes to the Strait of Hormuz amid the conflict in Iran, easing some of the immediate worries about the Middle East supply. Prices are still expected to remain elevated due to the growing supply squeeze caused by the conflict, which has driven supply disruptions and lowered inventories. In the physical market, the duty-paid premium aluminum consumers in Europe pay above the LME price rose this week to $450 a ton, its highest since August 2022.

LME aluminum stocks have fallen to their lowest since July. The war in Iran has affected deliveries from aluminum producers in the region that account for around 9% of global aluminum supply and sparked fears of disrupted imports of raw materials such as alumina to these producers via the Strait of Hormuz.

Tin: Tin lost 0.8% to $46,350.

Lead: Lead eased 0.6% to $1,918.

Nickel: Nickel eased 0.2% to $17,160.

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