Written Commentary
GOLD
April gold futures are lower after recently hitting a record high. Despite today’s pressure gold remains on track for the third consecutive weekly gain. The rally was fueled by dovish signals from Wednesday’s Federal Open Market Committee meeting and Federal Reserve Chair Powell’s statements. On Wednesday, the Fed acknowledged growing economic uncertainty and reiterated its plan for two interest rate cuts this year, which benefits non-yielding gold. Fed Chair Powell also downplayed the impact of President Donald Trump’s tariffs on inflation, calling it “transitory.”
Markets are also anticipating the April 2 deadline for President Donald Trump’s reciprocal tariffs on countries that have imposed duties on U.S. goods, further fueling global trade concerns. In addition, ongoing tensions in the Middle East continue to bring in a flight to quality flow of funds to precious metals.
Also, there has been substantial central bank buying of gold.
SILVER
May silver futures are lower, reaching a one-week low as the U.S. dollar strengthened. The dollar’s rebound followed comments from Federal Reserve Chair Jerome Powell, who reiterated that the central bank has no immediate plans to further cut interest rates, even though it had signaled two possible reductions this year. Powell highlighted concerns over slowing economic growth and the labor market, but remained cautious due to the uncertainty surrounding President Donald Trump’s tariff policies and their potential impact on inflation.
Ongoing economic issues in China weighed on silver’s industrial demand outlook, as Beijing recently unveiled new stimulus measures without offering specific details.
On the bullish side of the equation is the tightening supply situation. Over the past four years, silver supply has consistently fallen short of meeting demand. Industrial applications account for the majority of demand, making up approximately 60% of total silver consumption.
COPPER
May copper futures are lower but remain close to record highs that were made in May 2024. This surge In prices comes as traders shift shipments from Asia to the U.S. In order to capitalize on higher prices and avoid potential tariffs. There are reports that suggest between 100,000 and 150,000 metric tons of refined copper are expected to come into the U.S. in the coming weeks, which will tighten supply in China as demand is expected to increase with government efforts to stimulate consumption.
Currently, inventories on both the London and Shanghai exchanges are declining. President Donald Trump has recently threatened to impose tariffs on copper imports, which could further strain the already limited smelting capacity. Currently, the U.S. imports nearly half of its copper and depends on only two major smelters for domestic production.
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