Written Commentary
SILVER
After recent gains May silver futures are steady this morning. Traders have sought safe-haven assets in light of trade tensions and a slowdown in U.S. inflation. Anticipation of Federal Reserve interest rate cuts further boosted demand for precious metals, with the possibility of a lower interest rate environment making silver more attractive. Meanwhile, escalating trade tensions, with President Donald Trump imposing higher tariffs on steel and aluminum imports, fueled uncertainty and drove increased demand for silver as a hedge.
The long-term outlook for silver Is bullish in light of the supply-demand 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.
GOLD
April gold futures are higher, nearing record highs, as rising global trade tensions continued to drive demand for safe-haven assets. On Wednesday, President Donald Trump warned of new tariffs on EU goods following retaliatory measures by the EU and Canada against existing U.S. trade barriers. Commerce Secretary Howard Lutnick indicated that President Trump would impose trade protections on copper. U.S. inflation data, both headline and core numbers, came in below expectations, easing concerns about inflation and providing the Federal Reserve with more room to adopt a less restrictive policy.
COPPER
May copper futures are higher, remaining close to the highest levels seen since May of the previous year. This comes after U.S. Commerce Secretary Howard Lutnick stated that the U.S. will continue imposing tariffs on copper to promote domestic production. His remarks were made as President Donald Trump’s 25% tariffs on steel and aluminum took effect on Wednesday, with Lutnick emphasizing that these metals, including copper, are critical to national security and must be produced within the U.S. This policy shift would increase dependence on the country’s limited smelting capacity, as the U.S. imports nearly half of its copper and operates only two major smelters.
However, there is a different supply picture in China, which has abundant supplies and may limit the upside for copper.
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