Written Commentary
SILVER
Silver futures are sharply lower as investors took profits following a strong rally that saw prices break 13-year highs and as the Fed held rates steady. On the supply front, sentiment was further pressured by confirmation of a major discovery in Argentina, one of the largest copper, gold, and silver deposits in three decades, estimated to hold 13.2 million tons of copper and over 80 million ounces of gold and silver combined.
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. That demand has remained robust despite broad headwinds faced in the last few months as a result of tariffs. 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
Copper futures are trading around flatline after gaining strength in overnight trade. Geopolitical uncertainty over the Israel-Iran conflict worried investors already dealing with the demand picture for copper as a result of US tariffs. In Argentina, a site believed to hold 13.2 million tons of copper was found, the largest discovery in more than 30 years. The Philadelphia Fed manufacturing index for June was -4.0, matching May’s figure and below expectations of -1.7.
China, the world’s largest copper consumer, saw a mixed economic picture in recent data. Retail sales in May exceeded expectations, while industrial production came in below forecasts, suggesting uneven momentum in the post-pandemic recovery. Imports of copper into China also fell by 2.5% in May from April. The US and China said last week that they had reached an agreement to put the Geneva trade truce back on track and resolve China’s restrictions on rare earth metals and magnets. However, the agreement so far has failed to reassure markets as uncertainty remains regarding the larger tariff picture.
Copper inventories at the CME continue to break record highs as traders and producers rush to get copper in the US before an expected tariff is levied. CME copper stocks as of today are at 199,949 tons, over a 100,000 ton increase since late March.
GOLD
Gold futures are lower and poised for their worst weekly performance in more than a month as the Fed held rates steady at its policy meeting on Wednesday. The Fed maintains its prediction of two more rate cuts by the end of the year. Fed Chairman Jerome Powell noted that conditions in the labor market have held up well and are in line with a balanced labor market. Longer-term inflation measures remain consistent with the Fed’s longer-term goal, and inflationary pressures from tariffs will likely be felt in the coming months. The dollar is on pace to end the week higher, further weighing on gold prices. President Trump will decide in the next two weeks whether the US will get involved in the Israel-Iran conflict, the White House said on Thursday as the conflict enters its second week.
A recent survey by the World Gold Council (WGC) revealed that central banks globally anticipate an increase in gold holdings as a share of their reserves over the next five years while expecting a decline in their US dollar reserves. Seventy-three central banks participated in the WGC’s survey, conducted between February 25 and May 20. Of those, 76% expect their gold holdings to increase over the next five years, up from 69% in last year’s survey. Meanwhile, nearly three-quarters of respondents anticipate a decline in central banks’ US dollar-denominated reserves, compared to 62% who held that view a year ago.
Central banks across the globe added a net 12 tons of gold to their reserves in April, albeit at a slower rate of accumulation than in previous months. Global central banks are on pace to purchase 1,000 metric tons of gold in 2025, marking the fourth consecutive year of substantial buying. Central banks averaged a 400-500 metric ton rate of accumulation in the previous decade, marking a substantial increase in investment. Several African central banks—including those of Namibia, Rwanda, Uganda, and Madagascar—have recently announced plans to either initiate or expand their gold reserves.
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