Fed Cut Lends Support to Metals

Precious Metals

Gold: Gold prices are higher following the Fed’s decision to lower interest rates by 25 bps, while comments from Chair Powell were less hawkish than expected, sending yields and the dollar substantially lower, offering support to prices. The Fed’s Summary of Economic Projections saw no changes to its expectations for monetary policy from the September meeting, still expecting one 25 bp cut in 2026 and 2027. Powell said that the policy rate is now within broad estimates of neutral, which will allow the unemployment rate to stabilize or tick up one or two more tenths before coming down, while inflation is well placed to reach target after working through tariffs. Powell also said that he doesn’t think a rate hike is anybody’s base case at this point, just that some people felt that rate cuts should be paused for the time being.

Markets will also monitor any news regarding the Supreme Court’s ruling on President Trump’s sweeping tariffs, as the president recently signaled that he expects an unfavorable ruling. President Trump reiterated on Tuesday that the effects of appealing the tariffs could be disastrous for the economy, signaling that he could be expecting an unfavorable ruling towards his trade policies. Trump did suggest that the tariffs could stay but would require a longer implementation process, while calling the ruling the greatest threat to national security in history. In a social media post on Sunday, Trump argued that his method of instituting tariffs is far less cumbersome than other methods, suggesting that if the court knocks down his tariffs, there are still feasible ways to implement them.

Silver: Silver futures are up 2.7% to $62.74. Silver fundamentals have been supportive of prices as expectations that industrial demand for silver will pick up in the coming years. Sectors including solar energy, EV’s, data centers, and artificial intelligence will drive industrial demand higher through 2030, the Silver Institute industry association recently noted in a research report. Prices have also been supported by persistently low supplies and dwindling global inventories, which have contributed to a supply-demand deficit that is expected to be maintained over the coming years.

Platinum: Platinum is up 2.30% at $1,685.

Base Metals

Copper: Copper prices are higher following the Fed’s decision to lower rates, while continued outflows to the US supported LME prices. Benchmark three-month copper on the LME rose 1.3% to $11,708 after having touched a record peak of $11,771 on Monday. Copper is on track for its best yearly performance since 2009, being up 33%. Market perception that US tariffs on copper, expected to be announced in mid-2026 and implemented in 2027, have resulted in massive inflows in the US as producers and traders stock up. That dynamic has lent continued support to LME -COMEX arbitrage, as US inventories of copper reach over 500,000 tons. Elsewhere LME stocks are below 100,000 tons, while SHFE stocks have hovered under 90,000 tons, which is in line with the yearly average. Market rumors that the Chinese government is planning a 400 billion yuan ($56.63 billion) government mortgage subsidy package have also lent support for prices, as the property sector is a key consumer of industrial metals. Data out of China on Wednesday also showed that deflationary strains are persisting and domestic demand remains weak.

China has recently pledged to keep expanding domestic demand and the broader economy in 2026. The Politburo, a top decision-making body of the ruling Communist Party, said to state media on Monday. Elsewhere, China reported a drop in copper imports for a second consecutive month in November, as rising prices of the metal blunted appetite for shipments.

Zinc: Zinc gained 1.6% to $3,131.

Aluminum: Aluminum rose 0.6% to $2,885.

Tin: Tin climbed 1.0% to $40,400.

Lead: Lead added 0.3% to $1,985.

Nickel: Nickel fell 0.1% to $14,640.

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