Written Commentary
PRECIOUS METALS
Gold: Gold prices are higher, gaining momentum following this morning’s GDP and PCE figures, which support a hold on Fed policy, while US-Iran tensions continue to support the safe haven bid.
Real GDP increased at an annualized 1.4% in Q4, a sharp deceleration from Q3’s 4.4% pace. The slowdown primarily reflected declines in government spending and exports, alongside softer consumer spending. The federal government shutdown subtracted roughly 1 percentage point from Q4 growth. Despite the headline slowdown, real final sales to private domestic purchasers rose 2.4%, indicating that underlying private demand remained intact.
Headline PCE rose 0.4% month-over-month in December, while core PCE also increased 0.4%, both figures above forecasts for a rise of 0.3%. On a yearly basis, PCE inflation rose 2.9%, a step above the previous 2.8%, while core prices rose from 2.8% to 3.0%. The data supports a patient Fed stance, limiting the urgency for near-term easing while keeping mid-year cuts in play should disinflation resume.
President Trump warned Iran on Thursday that it must make a deal over its nuclear program or “really bad things” will happen, setting a deadline of 10 to 15 days. Earlier in the week, the White House said some progress was made in this week’s Iran talks in Geneva, though significant gaps remained. US security official met on Wednesday to discuss Iran and were told all US forces deployed to the region should be in place by mid-March.
Structural support for gold remains intact as central banks continue to diversify reserves away from the dollar and increase bullion purchases, a trend expected to provide a steady underlying bid through 2026.
Silver: Silver futures are up 4% to $80.70
Platinum: Platinum is up 3.4% to $2,139.
BASE METALS
Copper: Copper prices edged higher, despite subdued demand and high warehouse inventories providing headwinds to prices. Benchmark three-month copper on the LME added 0.1% in official activity to $12,820 and is set for a weekly loss of around 1%.
Copper stocks continue to rise in LME-approved warehouses, which has seen inflows for 14 straight days. LME warehouse stocks climbed by 9,575 tons on Friday to 235,150 tons, their highest level since March 2025. The cash LME copper contract was previously trading at a $97 a ton discount to the three-month forward, suggesting no pressing need for near-term metal.
Demand conditions out of China remain weak during the Lunar New Year holiday. The SHFE is closed until February 24 and traders in top metals consumer China have been largely absent due to the holiday. Price direction during the holiday will not accurately reflect copper fundamentals and demand given the absence of China.
Zinc: Zinc ticked up 0.1% to $3,343.
Aluminum: Aluminum prices rose 0.3% to a one week high of $3,103. Aluminum remains well below its local high of $3,356 reached in late January, though the metal remains supported by persistent supply concerns. Aluminum output in top producer China has recently reached the government-mandated annual production cap of 45 million tons, while another smelter in the US has shut down due to high power costs.
Tin: Tin shed 0.3% to $45,500.
Lead: Lead lost 0.4% to $1,947.
Nickel: Nickel added 0.3% to $17,330.
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