Written Commentary
PRECIOUS METALS
Gold: Gold is eyeing its best monthly gain in 50 years as prices continue to break records. Earlier in the session spot gold touched $5,594.82. Gold has gained over 28% so far this month. Investors across all spectrums have been pouring capital into gold amid a mix of US policy and rising geopolitical tensions. On Wednesday, crypto-group Tether’s CEO said it plans to allocate 10%-15% of its investment portfolio to physical gold, while the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, saw holdings at a nearly 4-year high. Adding to geopolitical uncertainty, President Trump on Wednesday pressed Iran to negotiate a nuclear deal, while Tehran threatened retaliation against the US, Israel, and other western allies.
The Fed held rates steady and signaled that rates may stay on pause for some time in a widely-expected move as labor conditions have stabilized, while inflation remains elevated. There was little surprising about the Fed’s move apart from the fact that it removed language from its prior statement saying that downside risks to employment had risen, signaling that policymakers are becoming less worried about a rapid downturn in the labor market. The Fed offered no hints about when another reduction in borrowing costs might come, noting that “the extent and timing of additional adjustments” to the policy rate would depend on incoming data and the economic outlook.
Gold prices are likely to continue to remain supported by geopolitical and economic uncertainty. Central bank demand also remains supportive of gold as banks across the globe as they look to reduce foreign exchange holdings and reduce reliance on the US dollar. Central bank buying and a broader move away from the dollar have remained supportive of gold prices and is set to continue to provide structural support for the metal throughout 2026.
Silver: Silver futures are up over 5% to $119.42. Silver is up nearly 64% so far this year, 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. However, major silver ETFs are seeing record volume in recent days as traders supported momentum-driven buying, adding to tightness in physical markets.
Platinum: Platinum is up 5.5% to $2,770.
BASE METALS
Copper: Copper prices hit a record high of more than $14,000 as speculators extended their buying spree, encouraged by expectations of strong demand and supported by a weak dollar and geopolitical concerns. Benchmark three-month copper on the LME jumped 9% to an all-time high of $14,268 earlier in the session. Speculative traders continue to pile in to base metals, helping drive prices higher. Metal specific fundamentals remain supportive, but at large macro positioning from asset managers is likely responsible the recent rally across the metals space. The gains came despite weak spot physical demand in China, where the Yangshan copper premium declined to $20 a ton on Wednesday. This is its lowest level since July 2024 and down from $55 in December. 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 surged 4.4% to $3,513.
Aluminum: Aluminum gained 2.1% in official trading to $3,325. 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 climbed 1.5% to $56,795.
Lead: Lead added 1.6% to $2,049.
Nickel: Nickel jumped 3.6% to $18,025.
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