Written Commentary
SILVER
March silver futures came under pressure yesterday after Federal Reserve Chair Jerome Powell told the Senate Banking Committee that the central bank isn’t in a hurry to reduce interest rates, pointing to a strong economy and persistent inflation. Markets also considered the potential impact of President Donald Trump’s escalating tariffs, which include a 25% levy on steel and aluminum imports set to begin on March 4. Despite these factors, silver prices are still supported by expectations of stronger industrial demand, especially from the renewable energy sector, along with predictions of continuing supply deficits.
GOLD
April gold futures came under pressure due to the larger than expected increase in the January consumer price index, which puts pressure on the Federal Open Market Committee to move more slowly toward additional accommodation.
Despite declines today gold’s potential upside remains supported by strong safe-haven demand, fueled by President Trump’s announcement of aggressive tariff measures and the prospect of additional trade duties. Other factors providing support include continued gold purchases by central banks and ongoing geopolitical tensions.
Central bank demand for gold remains strong, with the People’s Bank of China adding to its reserves for a third consecutive month in January, according to official data.
COPPER
After advancing to an 8-month high on Monday March copper futures have come under pressure. Some of this can be linked to news that U.S. President Trump decided against imposing tariffs on copper imports, which is a move he had previously threatened. While tariffs were applied to base and ferrous metals such as steel and aluminum, copper was excluded from the executive order, leading to increased competition from domestic producers and putting downward pressure on prices.
Copper futures remain up by 15% since the start of the year, supported by signs of growing demand. Data from the Institute for Supply Management revealed that U.S. manufacturing activity unexpectedly expanded for the first time in over two years, increasing hopes that the sector’s downturn may be over.
In addition, expectations of significant fiscal stimulus from the Chinese government continued to support projections of higher base metal consumption this year.
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