Written Commentary
Precious Metals
Gold: Gold prices continue to fall, with gold hitting a three-week low, as signs of thawing US-China trade tensions has reduced safe-haven demand from investors ahead of a meeting between President Trump and President Xi. Before the highly anticipated summit, focus will turn to the Federal Reserve’s policy decision on Wednesday. The Fed is expected to lower interest rates by 25 bps, while investors will parse any forward-looking commentary from Fed Chair Jerome Powell. Fed Funds futures have shown that investors have slightly scaled back expectations of a rate cut in December. Odds of a December cut have fallen below 90%, down from over 98% a week ago. Trump on Monday said he thought a trade agreement would be reached with China, and also signed trade and critical minerals deals in Malaysia with four Southeast Asian nations.
Gold remains up nearly 50% year-to-date, supported by economic and geopolitical uncertainty, robust central bank purchases, strong ETF inflows and the “debasement” trade. Continued purchasing of gold by central banks will continue to provide long-term support for the yellow metal.
Silver: Silver are higher, breaking from gold. Silver fell more than 6% last week as profit-taking hit the market amid concerns of overvaluation after the metal surged to record highs. Still, robust industrial demand from the tech and renewable energy sector will be supportive of prices long-term.
Platinum: Platinum fell 1.7 % to $1,556.
Base Metals
Copper: Copper prices dipped on profit-taking ahead of the Fed meeting and US-China talks. Benchmark three-month copper on the LME was down 1.1% to $10,910.50 earlier in the morning. The metal touched $11,094 on Monday, just short of its all-time peak of $11,104.50, driven by hopes that Trump and Xi could secure a deal to ease US-China trade tensions. Trump said Monday he feels optimistic about reaching a deal with China after trade negotiators agreed on a framework The cash LME copper contract had nearly a $24 a ton discount to the three-month forward, suggesting little need for immediate delivery of metal. Meanwhile, the Yangshan copper premium, stood at $35 a ton, down from $58 in late September.
China’s industrial profits grew at their fastest pace in nearly two years in September. Industrial profits rose at an annual rate of 21.6% in September, the fastest pace since November 2023, following a 20.4% jump in August, data from the National Bureau of Statistics showed on Monday. Industrial profits grew 3.2% over the January-September period. China is also scheduled to release October’s purchasing managers index figures on Friday. Despite the growth in profits, copper purchases in China have yet to pick up pace, reflected in the Yangshan premium.
Zinc: Zinc dropped 1.1% to $3,020.50. Zinc stocks in LME-approved warehouses are at 37,050 tons, the lowest since March 2023 and down more than 80% since the middle of April. Worries about supplies on the LME market pushed the premium for the cash zinc contract over the three-month forward to a record high of $338.74 a ton. It was last around $250 a ton.
Aluminum: Aluminum fell 0.6% to $2,856 a ton.
Tin: Tin dipped 0.2% to $35,820.
Lead: Lead lost 0.4% to $2,016.
Nickel: Nickel shed 0.7% to $15,165.
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