Written Commentary
BASE METALS
Copper: Copper prices fell, pressured by a stronger dollar and profit-taking as investors lock in gains following the record high recorded in the previous session. Copper hit a record high of more than $14,000 on Thursday. Benchmark three-month copper on the LME dropped 1.3% to $13,440 earlier in the session, but held above its 21-day moving average, which provides support at $13,019. The selloff in base metals is being driven by a stronger dollar after President Trump named former Fed Governor Kevin Warsh to head the central bank when Powell’s term ends in May.
Speculative traders piled in to base metals this week, lifting the LME’s index of six base metals contracts to its own record high. Metal specific fundamentals remain supportive despite weak spot physical demand in China, where the Yangshan copper premium stood at $27 a ton, recovering slightly from a drop to $20 on Wednesday. The cash LME copper contract was trading at a $90 a ton discount to the three-month forward on Wednesday, suggesting little short-term demand on the LME.
Concerns regarding supply disruptions over the past 12 months continue to provide underlying support for prices as forecasts of soaring AI datacenter growth points to elevated long-term demand. Demand prospects from China are also in focus in light of the country’s economic growth plans after a surge in investment was announced by the state grid earlier this month. China’s state grid said that it would spend four trillion yuan ($574 billion) to upgrade the country’s power grid between 2026 and 2030.
Zinc: Zinc dropped 1.2% to $3,371.
Aluminum: Aluminum fell 2.7% to $3,132. Goldman Sachs raised its first-half average price forecast to $3,150 a ton, from $2,575, citing low inventories, doubts over power availability for new smelters in Indonesia and robust global demand growth from electric vehicle producers and power grids.
Tin: Tin slid 2.2% to $53,895.
Lead: Lead shed 0.4% to $2,005.
Nickel: Nickel lost 3.8% to $17,675.
PRECIOUS METALS
Gold: Gold prices tumbled overnight as a strong wave of profit-taking overtook markets as investors got out of positions ahead of the weekend alongside a rise in the dollar. The dollar found support following President Trump’s nomination of former Fed governor Kevin Warsh as Fed Chair. Warsh has been critical of central bank policy in recent years and favors a lower neutral policy rate. Warsh also has experience serving as a Fed governor from 2006 to 2011. That experience is likely offering the dollar support, alleviating some nervousness in the markets that the Fed Chair pick would be a lot more dovish. Additionally, government shutdown fears have eased after Republican and Democratic lawmakers hammered out a deal to stave off a looming government shutdown. April COMEX contracts are down 4.5% to $5,112.
Geopolitical tensions have been shrugged off by markets; President Trump said on Thursday he planned to speak with leaders in Tehran, even as the US dispatched another warship to the Middle East and Pentagon chief Pete Hegseth said the military would be ready to carry out whatever the president decided. The White House also said Trump signed an executive order for tariffs on countries that provide oil to Cuba, while he threatened new tariffs on Canada and said the United States was decertifying business jets made there.
Still, structural support for gold persists as central banks continue diversifying away from the dollar, reducing FX reserves and increasing gold purchases—a trend expected to provide ongoing support through 2026. Investment demand remains strong as Tether’s CEO recently said the firm plans to allocate 10%–15% of its investment portfolio to physical gold, while SPDR Gold Trust holdings rose to a nearly four-year high this week, signaling renewed institutional and ETF inflows.
Silver: Silver futures are down 12% to $100.62. profit-taking on the last day of trading in January is hammering prices. Silver is up nearly 28% so far this year, after previously gaining 60% on the year earlier in the week, fueled by supply deficits and momentum buying. The silver, platinum and palladium markets are small relative to gold, making them vulnerable to speculative inflows. This dynamic has presented the risk that prices have become detached from physical demand conditions. Additionally, record high prices could be poised to limit industrial demand.
Platinum: Platinum is down 12.8% to $2,272.
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