Silver Higher Despite Semiconductor Threat

SILVER

Silver futures are higher, following moves in gold as markets assess possible tariffs on semiconductors, in which silver is a key ingredient. President Donald Trump announced updated tariff rates on 21 countries that have not reached trade agreements with Washington, including major exporters such as Japan and South Korea, both of which will face 25% levies.

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. South Korea’s exports rebounded in June largely on brisk semiconductor shipments, indicating the importance of and demand for the technology, despite challenges from higher US tariffs weighing on global trade. Recent data highlights this trend: China significantly increased 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. Additionally, the structural supply-demand deficit remains favorable for silver, with the market expected to remain in a deficit for the fifth straight year.

COPPER

Copper futures pared losses from Wednesday in overnight trade after President Trump announced a date for copper tariffs to be implemented. Contracts settled nearly 10% higher on Tuesday, reaching all-time highs following an announcement from President Trump that he would be levying a 50% tariff on copper imports into the US.

Trump announced on Wednesday a new 50% tariff on copper to start on August 1. Trump also said he would soon announce tariffs on semiconductors, although he similarly did not offer a tariff level or date. The Commerce Department has been conducting investigations into tariffs on those products under Section 232 of the Trade Expansion Act of 1962, which allows tariffs to be applied on goods considered essential for national security. The US depends on imports for nearly half of its refined copper needs and brought in 810,000 metric tons in 2024, according to the US Geological Survey.

Chile, the world’s top copper producer, is in wait-and-see mode, as its foreign ministry said in a statement that it had not received any formal official communication regarding the implementation of US copper tariffs. Chile is the largest supplier of copper to the US. Chile, Canada, and Peru have told the administration that imports from their countries do not threaten US interests and should not face tariffs. All three have free trade deals with the US.

The threat of tariffs on the metal used in the power and construction industries has created a massive premium for copper prices on COMEX above those on the London Metal Exchange, which are currently around $9,500 a ton vs. $12,330 per metric ton in the US. The high premium is likely to attract more metal to the United States.

Chile exported $4.67 billion of copper in June, up 17.5% from the same month a year earlier, the central bank said on Monday. Meanwhile, production at Ivanhoe Mines’ Kamoa-Kakula mine in the Democratic Republic of Congo jumped 11% year-on-year to 112,009 metric tons of copper in the second quarter, the company said in a statement on Tuesday. Output rose despite seismic challenges that disrupted operations earlier this year. The Canadian miner resumed operations in June and cut its 2025 production guidance by nearly 30% to between 370,000 tons and 420,000 tons.

GOLD

Gold prices are higher after finishing higher Wednesday, though gains were capped by a stronger US dollar as it held near a two-week high.

President Trump said on Wednesday his administration will charge Brazil a 50% tariff on products sent to the US starting August 1. Trump cited the country’s treatment of former President Jair Bolsonaro, who is on trial in Brazil’s Supreme Court on charges that he plotted a coup in 2022. This came on the heels of several other tariff announcements against several other countries, including Brunei, Moldova, Algeria, Iraq, the Philippines, and Libya. Those tariffs ranged from 20% to 30%.

Meeting minutes from the FOMC’s meeting in June showed that only a couple of members of the board would be open to considering an interest rate cut at the July meeting, data dependent. Unsurprisingly, the entirety of the board viewed it as appropriate to leave rates unchanged at the June meeting. The minutes also showed that the board was still uncertain as to the level and lasting impacts of tariffs effect on inflation, although it was certain that increased tariffs were likely to put pressure on prices. Longer-term inflation expectations continued to be well anchored. The board still expects there to be two 25 bps rate cuts both this year and next year.

Strong central bank demand continues to support gold prices, with a recent World Gold Council survey showing global central banks expect to increase their gold holdings. In 2025, central banks are on track to buy 1,000 metric tons—well above the previous decade’s average of 400–500 tons—with several African nations like Namibia, Rwanda, Uganda, and Madagascar planning to expand their reserves.

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