Written Commentary
GOLD
Gold futures pared losses in overnight trade after President Trump announced a trade deal with the UK on Wednesday, lowering safe-haven demand as traders shift their attention to US-China trade talks this weekend. The dollar index rose to a three-and-a-half-week high yesterday, further weighing on gold prices.
Gold stored in the Bank of England decreased at a similar rate as it did in March as commercial vaults in London saw an increase in their gold holdings. COMEX gold stocks, which have been falling since early April, saw the largest daily decline on Wednesday, according to the COMEX data, with outflows of 28.8 tons worth $3.1 billion.
China’s central bank has approved foreign exchange purchases by some commercial banks to pay for gold imports under newly increased quotas, increasing demand for dollars and gold alike. The move comes after Chinese authorities announced several stimulus measures, including interest rate cuts and a liquidity injection, as the country deals with the fallout over the trade war with the US.
SILVER
July silver futures steadied around $32.73 in overnight trade, recovering some losses from Thursday as investors took a cautious stance ahead of the US-China trade talks this weekend. The market will be closely watching for any signs of de-escalation.
The Trump administration is planning to rescind export curbs on A.I. chips, as confirmed by a Commerce Department official. Silver is a key ingredient used in A.I. technology. The long-term demand picture for silver continues to be robust, driven by its essential role in solar panels, semiconductors, and other clean-energy technologies. Global silver supply is projected to grow steadily, with mine production anticipated to hit a seven-year peak in 2025. This growth is attributed to increased output from Canada, Peru, Russia, and the US, as well as significant contributions from silver recycling. The industrial sector accounts for half of the total silver demand.
Silver held in London vaults in April was up 3.3% from March, the first time silver holdings in London have increased since October 2024.
COPPER
July copper futures recovered losses in the early morning after briefly hitting a five-day low of $4.4775 overnight. Prices briefly rose on Thursday as sentiment was boosted by the US-UK trade deal that leaves in place Trump’s 10% tariffs on British exports, expands agricultural access for both countries, and lowers prohibitive U.S. duties on British car exports. July copper futures are hovering around $4.61.
Copper production from the Chilean state-run miner, Codelco, who is also the world’s largest miner of copper, rose 15% year-over-year in March to 123,200 tons. Meanwhile, production at the world’s largest copper mine, owned by BHP, climbed 19% to 120,600 tons.
Copper stock at the Shanghai Futures Exchange are expected to trend lower when the report comes out today. Chinese consumers have been dealing with a tight copper market which has been impacted by a lack of scrap imports from the US, China’s top source of scrap metal. Copper from around the world has been directed to the US as consumers and traders raced to get shipments in the US in anticipation of tariffs. Comex stocks have surged to 156,623 tons as of Wednesday, up 61% since March, and reached their highest levels since October 2018.
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