Written Commentary
PRECIOUS METALS
Gold: December gold contracts fell lower despite a drop in the dollar and a fall in Treasury yields, likely suggesting that traders are booking profits following gold’s strong advance over the last 10 days. Markets are pricing just a 31% chance of a rate hike in September following soft headline figures for July’s CPI and PPI prints. While the reports were friendly to prices as inflation did note rise above forecasted, underlying inflationary pressures continued to remain firm. For many, the reports continue to make the case for the Fed to hold on rates, which will leave further upside in precious metals contingent upon whether or not upcoming data can leave that narrative intact.
However, next month’s readings will likely reflect the rebound in energy prices and the backdrop of an unresolved Strait of Hormuz disruption leaves a material risk that the energy shock re-accelerates headline inflation and feeds into expectations. Still, breakeven inflation remains well contained, suggesting that while underlying price pressures remain firm, markets continue to expect the Fed to ultimately bring inflation under control. That backdrop is supportive for gold over the longer term and, so long as inflation expectations remain anchored, could help keep the 10-year yield below 4.70%.
Silver: September contracts are down 0.6% to $65.27.
BASE METALS
Copper: Copper prices on the LME slipped 0.4% to $14,080 as traders booked profits, while COMEX prices are down 0.14% at $6.60. Prices also fell in China, with SHFE copper down 0.7% leaving the Yangshan copper premium to hit its lowest level in four weeks at $95 a ton. While questions over the impact of the Iran war raise questions over the risks to the global economy and potential drag on demand, supply worries continue to put upward pressure on prices. Lower production expectations in Chile and dwindling available copper stocks in LME warehouses keep the cash-to-three-month spread remains in backwardation near its highest level since October 2025. Falling inventories outside the US have been the main catalyst in setting up bullish conditions for the metal despite the uncertainty over the status of US-Iran negotiations. However, the uncertainty over those dynamics could leave copper vulnerable to a modest pullback if negotiations deteriorate. Strong demand for AI infrastructure buildout and supportive Q2 results from several large AI-names have also lifted sentiment and expectations that the new technology will support longer-term demand prospects.
Zinc: Zinc lost 0.8% to $3,727.
Aluminum: Aluminum dropped 1.1% in official activity to $3,274. Emirates Global Aluminum announced it would resume full-scale production in the first quarter of 2027, after it was damaged in strikes during the US-Iran war, easing concerns over future supply deficits.
Tin: Tin rose 0.8% to $56,250.
Lead: Lead gave up 0.6% to $1,899.
Nickel: Nickel shed 0.7% to $16,830.
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