Written Commentary
GOLD
Gold futures hit fresh highs following the weak labor data out of the US this morning that saw payrolls rising by just 22,000, well below expectations of 75,000 while the unemployment rate was little changed at 4.3%. Notably, revisions to prior months showed June was worse than initially reported (-13,000), and July slightly better (+79,000), resulting in a net downward revision of 21,000 jobs. Overall, the labor market appears to be cooling but remains stable given the unemployment rate. The data cemented the case for a rate cut in September and has opened the door for further easing from the Fed. Fed funds futures have priced in a 100% chance of a rate cut in September, and a 74% chance of an additional 25 bp rate cut at the following meeting in October.
Gold also continues to draw strong demand from central bank purchasing and geopolitical uncertainty regarding the situations in Ukraine and the Middle East. Central bank holdings of gold have topped holdings of US Treasurys for the first time since 1996. Poland’s central bank Governor Adam Glapinski plans to propose an increase in the target for gold as a percentage of reserves to 30% from 20% currently. August gold in reserves data from China’s central bank, due on Sunday, will not catch the September record highs, but may still provide more clarity on how demand from central banks are being affected by high bullion prices.
COPPER
Copper futures are higher, thanks to a weaker dollar and expectations of future interest rate cuts from the Fed after the weak payroll data. Lower interest rates improve prospects for growth-dependent metals, while a weaker US dollar, makes dollar-priced metals more attractive for foreign currency holders.
Chile’s state-owned copper producer Codelco has warned that national copper output may stagnate around 5.5 million tonnes annually due to increasingly difficult mining conditions. Chairman Máximo Pacheco highlighted deeper mining operations, falling ore grades, and rising costs as major challenges. This production plateau could tighten global copper supply just as demand accelerates, driven by the energy transition and electrification trends.
Meanwhile, China’s refined copper production is expected to decline by 4–5% in September—the first drop for this period since 2016—due to new tax rules affecting scrap copper smelting profitability and increased maintenance shutdowns. Despite seasonal demand strength, tight anode supply is limiting output, potentially supporting copper prices amid expectations of a US rate cut. However, analysts still expect China to post record annual output. In the US, ISM Manufacturing PMI data showed continued contraction in August, though new orders rebounded. Production and employment weakened, and input prices remained elevated, with tariffs cited as a persistent drag. In contrast, China’s manufacturing surveys showed expansion, signaling stronger demand for industrial metals. Yet, rising copper inventories in LME and COMEX warehouses suggest weaker demand outside China, which could cap further price gains unless global consumption picks up.
SILVER
Silver futures are sharply higher thanks to the weak labor report, which cemented hopes of a September rate cut from the Fed. The labor data also saw the dollar fall steeply, adding further momentum to silver prices.
On the macro-front, China’s industrial momentum remains strong, with recent data showing solar cell exports surged over 70% in the first half of the year, fueled by robust photovoltaic demand from India. This follows a record-breaking installation of more than 93 gigawatts of solar capacity in May—a 300% year-over-year increase—driven by a rush to connect panels ahead of upcoming policy changes that will tighten grid access.
On the supply side, global silver mine production has declined by 7% since 2016, contributing to an estimated shortfall of 800 million ounces between 2021 and 2025. Investor appetite remains resilient, with silver-backed exchange-traded products (ETPs) attracting net inflows of 95 million ounces in the first half of 2025. Since 2019, over 1.1 billion ounces have been withdrawn from mobile inventories.
Silver prices continue to find support from a persistent structural supply deficit and strong investor demand. Industrial usage is expanding, particularly in energy-related sectors such as solar power, electric vehicles, and electronics. Notably, solar applications accounted for 17% of total silver demand last year—triple their share from a decade ago.
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