Written Commentary
Precious Metals
Gold: Gold prices slipped ahead of the Fed’s policy meeting on Wednesday, where an interest rate cut is widely expected. Data last week showed that US consumer spending grew moderately in September, while the Fed’s PCE inflation gauge met forecasts at 2.8%. The spending figures reflected a slowdown in economic momentum amid rising costs and weakness in the labor market as private payrolls figures saw their steepest decline in over two-and-a-half years in November with a net 32,000 decline per ADP. Fed Funds futures are pricing just under a 90% chance that the Fed will lower rates on Wednesday. The high expectations have emerged despite a divide among policymakers over whether to focus on the labor market or inflation, which some at the Fed worry could still be too high. Recent comments from several influential officials for the third cut of this year have cemented bets, though the prospects for 2026 are seen as less certain. Focus on the Fed will meeting will center around the Fed’s new interest rate expectations as officials at the Fed have seemingly become highly divided on how to move on interest rates. There is likely to be several officials who do not see any easing in 2026.
Markets will also monitor any news regarding the Supreme Court’s ruling on President Trumps sweeping tariffs as the president recently signaled that he expects an unfavorable ruling. 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 down 0.5% to $58.78.
Platinum: Platinum is up 0.8% at $1,674.
Base Metals
Copper: Copper prices hit another record high to kickoff the week on Monday as supply worries, a weaker dollar, and expectations that the Fed will lower rates on Wednesday set up bullish conditions for the metal. Benchmark three-month copper on the LME was up 0.5% at $11,676 from an earlier peak at $11,771. Market focus is also on China, where the country recently pledged to keep expanding domestic demand and the broader economy in 2026 per the Politburo, a top decision-making body of the ruling Communist Party, which was cited as saying so on Monday by state media.
LME-COMEX arbitrage continues to provide support for copper prices as well. Copper continues to flow into the US ahead of potential tariffs on US copper imports, which has drawn down LME stocks and sent COMEX warehouses to all-time highs. Comex warehouses currently sit at just above 436,000 tons, while LME stocks are below 100,000 tons. Concerns over tight supply conditions outside the US remain elevated as expectations of deficits in 2026 persist following several mine disruptions this year. Glencore recently lowered its 2026 copper production guidance to a range with a midpoint of 840,000 tons for 2026, down from 930,000 previously, highlighting the drop in output that has led to forecasts of strong deficits in 2026. The copper market is expected to enter a global refined deficit of 330,000 tons in 2026.
Zinc: Zinc gained 0.7% to $3,119.
Aluminum: Aluminum was little changed at $2,896.
Tin: Tin firmed 0.8% to $40,390.
Lead: Lead added 0.5% to $2,013.
Nickel: Nickel eased 0.2% to $14,905.
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