Written Commentary
SILVER
Silver futures are lower in overnight trade, pressured by profit taking and a stronger dollar. Spot silver sharply rose 4.7% to $34.54 an ounce Monday, marking its highest level since October 23, hitting an over seven-month peak during the session. Monday’s rally was fueled by strong safe haven demand spurred by a re-escalation in US-Sino trade conflicts.
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. 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
July copper futures fell, reversing some gains from yesterday, as factory activity in top metals consumer China fell, indicating that U.S. tariffs were affecting the manufacturing superpower while trade tensions between Washington and Beijing dragged on. Recent PMI data showed that factory activity across Asia slowed in May due to uncertainty over US tariffs and subdued demand, impacting new orders.
July contracts jumped nearly five percent Monday, with prices hitting $4.9495 a pound, the highest level since April 3. The rise came as President Trump announced 50% tariffs on aluminum and steel, adding to speculation that copper will receive a similar fate. In February, President Trump ordered a probe into possible new tariffs on copper imports to rebuild US production of a metal critical to electric vehicles, military hardware, and semiconductors.
CME copper stocks rose to record highs of 180,501 tons on Friday, while US government data shows copper imports in March rose to more than 123,000 tons compared with around 58,000 tons in February and 76,000 in January. Stocks at the Shanghai Futures Exchange rose to 105,791 tons after falling to 98,671 tons a week earlier. The surge in imports comes as producers and traders seek to get the metal into the US before a possible tariff is implemented on the metal.
Markets will continue to monitor the ongoing trade situation with China, with traders waiting for a possible call between President Trump and Chinese leader Xi Jinping.
GOLD
Gold futures pulled back in overnight trade on profit-taking a slightly stronger dollar after nearing four-week highs in yesterday’s session. Yesterday’s rally was fueled by an escalation in trade tensions between the US and China as both countries accused each other of undermining the 90-day truce they agreed to in Geneva.
Traders will monitor the highly anticipated JOLTS job openings report for April, due at 9:00 a.m. CT. Last month showed 7.192 million job openings. The data will be a key indicator of the impact of US tariffs on the job market. The reading will give insight into how the post-tariff economy is holding up in the US, and labor market data will be key to assessing any potential moves from the Fed in the future. Markets are expecting 50 bps of easing this year from the Fed, with the first rate cut coming at the September meeting. Rate cuts from the Fed would be supportive of gold, which benefits in a low-interest-rate environment.
Gold’s near-term outlook remains volatile; future movements will mostly depend on the evolution of US trade policy and signals from the Fed on their path regarding monetary policy. On Sunday, Treasury Secretary Scott Bessent said President Trump would soon speak with Chinese President Xi Jinping to iron out a dispute over critical minerals. Long-term, strong central bank and investor demand remain in favor of gold’s upside.
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