Written Commentary
GOLD
Gold futures are little changed in overnight trade. ADP nonfarm payroll employment change data showed only 37,000 new hires, sharply lower than expectations of 110,000 and below last month’s reading of 60,000. Official nonfarm payroll data will be released Friday; investors will be awaiting the report for clues on the Fed’s future monetary policy. A slowing labor market will add to the probability of a Fed rate cut, which would be supportive of gold, which benefits in a low-interest rate environment. Markets are expecting 50 bps of easing this year from the Fed, with the first rate cut coming at the September meeting.
Gold’s near-term outlook remains volatile; future movements will mostly depend on the evolution of US trade policy and signals from the Fed on their path regarding monetary policy. On Sunday, Treasury Secretary Scott Bessent said President Trump would soon speak with Chinese President Xi Jinping to iron out a dispute over critical minerals. Long-term, strong central bank and investor demand remain in favor of gold’s upside.
SILVER
Silver futures are little changed after retreating from seven-month highs reached Monday. Investor sentiment remains cautious amid heightened US-China trade tensions. President Donald Trump said Wednesday that it was “extremely hard” to reach a deal with President Xi Jinping, even as the White House suggested the two leaders could speak this week.
Spot silver sharply rose 4.7% to $34.54 an ounce Monday, marking its highest level since October 23, hitting an over seven-month peak during the session. Monday’s rally was fueled by strong safe haven demand spurred by a re-escalation in US-Sino trade conflicts.
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. 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
July copper futures are higher, reversing some losses from yesterday, as factory activity in top metals consumer China fell, indicating that U.S. tariffs were affecting the manufacturing superpower while trade tensions between Washington and Beijing dragged on. Recent PMI data showed that factory activity across Asia slowed in May due to uncertainty over US tariffs and subdued demand, impacting new orders.
July contracts jumped nearly five percent Monday, with prices hitting $4.9495 a pound, the highest level since April 3. The rise came as President Trump announced 50% tariffs on aluminum and steel, adding to speculation that copper will receive a similar fate. In February, President Trump ordered a probe into possible new tariffs on copper imports to rebuild US production of a metal critical to electric vehicles, military hardware, and semiconductors.
Factory orders dropped sharply in April as the boost from front-loading of purchases ahead of tariffs faded. Data from the Commerce Department’s Census Bureau showed a -3.7% fall, after an unrevised +3.4% jump in March. The government also reported that orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, decreased -1.5% in April rather than -1.3% as estimated last month. Shipments of these so-called core capital goods fell by an unrevised 0.1%.
Peru’s Energy and Mines Minister Jorge Montero said he expects mining investment for the world’s third-largest copper producer to reach $4.8 billion this year and for copper output to reach 2.8 million metric tons. Last year, Peru produced roughly 2.7 million tons of copper.
Markets will continue to monitor the ongoing trade situation with China, with traders waiting for a possible call between President Trump and Chinese leader Xi Jinping.
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