Written Commentary
PRECIOUS METALS
Gold: Gold prices are sharply higher a wave of the “Sell America” trade grips market following a rise political tension between the US and Europe over Greenland. Trump warned that eight NATO members, namely Denmark, Norway, Sweden, Finland, Germany, the UK, France and the Netherlands, could face a 10% tariff beginning February 1, which could rise to 25% on June 1 unless a deal for Greenland is reached. European leaders condemned the remarks as unacceptable while weighing their options for possible retaliation. Focus is now turning to the World Economic Forum in Davos, where Trump is reportedly set to hold a meeting with other countries over Greenland. The greenback is also sharply lower, further supporting precious metals prices, with the index falling nearly 1%.
A potential Supreme Court ruling on the legality of Trump’s use of emergency powers to impose sweeping tariffs could come as well, while the court is also set to hear arguments on Wednesday over the president’s effort to fire Fed Governor Lisa Cook back in August. Inflation data out Thursday will be important for interest rate expectations following December’s payrolls data, which reflected a stable labor market. Money markets currently price in a rate cut in July and are favorable of an earlier move in June
Silver: Silver futures are over 7% higher as the metal echoes the same factors that is driving gold prices higher.
Platinum: Platinum is 5% lower at $2,439.
BASE METALS
Copper: Copper prices dropped as higher prices dented demand from industrial consumers. Benchmark three-month copper on the LME slipped 0.2% to $12,937. LME copper has surged by 30% over the past six months, touching a record peak of $13,407 last week, driven by speculative buying on the back of worries that mine disruptions will create shortages. The Yangshan premium, a key indicator of Chinese copper consumption, has halved over the past month to its lowest level since mid-2024. Record higher prices warned are likely starting to weigh on demand by squeezing corporate profit margins for large metal consumers. Prices have also felt pressure after the US opted to defer tariffs on critical minerals, while China stepped up its crackdown on high-frequency trading, which plays a significant role in commodity markets.
Zinc: Zinc fell 0.8% to $3,195.
Aluminum: Aluminum dropped 0.7% to $3,135.
Tin: Tin jumped 3.8% to $51,150. Recent talk of a government clampdown on illegal tin mining in Indonesia have spurred supply worries. Tin has also gained support from market bets of rapid growth and demand for tin on the back of the artificial intelligence boom. However, Tom Langston at the International Tin Association said that the supply-demand metrics have not shifted, noting that fund interest for LME tin was at record levels.
Lead: Lead slid 1.5% to $2,030 after data showed that inventories on the LME rose 11% in one day.
Nickel: Nickel lost 1% to $17,950. Miner PT Vale Indonesia said that the mining production quota it received from the Indonesian government will likely not be sufficient to meet demand from smelters this year.
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