Written Commentary
GOLD
Gold futures are lower as investors seek the dollar over the yellow metal amid the growing conflict in the Middle East after the US struck multiple Iranian Nuclear sites over the weekend. President Trump said late Saturday that the US had struck Iran’s three main nuclear enrichment facilities, claiming the sites had been “totally obliterated.” He threatened Iran with more attacks if the country did not quickly seek peace talks. The focus now shifts to Iran’s next move, how the country will react either militarily or diplomatically. Its foreign minister said it reserves “all options,” while its parliament voted to block the Strait of Hormuz, which one-fifth of the world’s oil flows through, although Iran’s leaders have yet to make a decision. Continued geopolitical uncertainty will likely provide support for gold’s upside.
Focus this week on the economic front will be data Friday on the US core personal consumption expenditures price index for May. This is the Federal Reserve’s preferred measure of inflation and could provide insights on the trajectory for interest rates. In, investors are looking ahead to fresh economic data, including US existing home sales and PMI reports, for insights into the underlying strength of the economy.
Strong central bank purchasing of gold will remain favorable for gold’s upside, a recent survey by the World Gold Council (WGC) 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 traded sideways as traders absorb the developments in the Middle East. The dollar strengthened overnight, pressuring silver prices. Last week, silver had rallied to over 13-year highs, buoyed by safe-haven flows, particularly as an alternative to gold, alongside signs of strong industrial demand and tight supply conditions. However, the rally has since lost momentum, with recent declines driven by profit-taking and liquidity pressures as investors moved to cover losses in other asset classes.
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. 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.
COPPER
Copper futures fell as the escalating tensions in the Middle East weigh on sentiment. Manufacturing and Services PMI for June will be released at 8:45 a.m. CT, with readings of 51.1 and 52.9 expected to come in respectively. The data will be watched for improvements from May’s reading as rising tensions in the Middle East, higher oil prices, and the effect of tariffs all weigh on business sentiment and activity.
Other data in the week ahead include existing home sales at 9:00 a.m. Monday, first quarter current account figures Tuesday, and new home sales Wednesday. Durable goods orders, the third estimate of US first quarter gross domestic product, weekly jobless claims, and pending home sales are due Thursday, followed by the final June University of Michigan consumer confidence survey Friday. The data will provide key insights to traders who look to gauge demand for copper in the US.
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 which are greater than the total stocks levels to lend back to the market at a zero premium. Copper stocks in LME registered warehouses at 99,200 tons have dropped more than 60% since the middle of February and are at their lowest since August 2023 while copper inventories at the CME continue to break record highs. Traders and producers rush to get copper in the US before an expected tariff is levied. CME copper stocks as of today are at 201,197 tons, over a 100,000 ton increase since late March.
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