Written Commentary
SILVER
May silver futures are higher as traders moved funds into safe-haven assets in light of growing concerns about global growth and inflation.
Investors are now turning their attention to the upcoming release of U.S. consumer price data for March on Thursday, which is expected to provide crucial insights into inflation trends and the Federal Reserve’s policy stance.
Also supporting precious metals is the interest rate outlook as traders anticipate the Federal Open Market Committee may more aggressively reduce interest rates this year. Currently it looks like the Fed will be lowering its key interest rate four times this year taking the fed funds rate 100 basis points lower to 3.25% to 3.50%.
COPPER
May copper futures are higher, recovering from a recent three-month low. The rebound was driven by domestic supply concerns, which provided some relief in light of growing fears that a potential global economic downturn, which could reduce manufacturing activity. This bounce also helped widen the premium for copper traded on U.S. exchanges compared to similar contracts on the LME after a brief narrowing due to the anticipation of tariffs on copper announced by President Donald Trump.
These tariffs highlighted the limited production capacity within the U.S. Copper futures have dropped over 20% from their record high on March 26, as the broad tariffs imposed by President Donald Trump and China’s retaliatory measures have dampened the manufacturing outlook in both major copper-consuming nations, despite the fact that copper and energy were excluded from the specific tariffs.
GOLD
June gold futures surged almost 3% on Wednesday, driven by heightened demand for safe-haven assets In light of growing concerns over a potential global economic weakness. China announced it would increase its retaliatory tariffs on U.S. goods to 84%, up from 34%, further intensifying tensions between the world’s two largest economies. This move came after President Donald Trump imposed tariffs on several countries, including a significant increase on Chinese goods to 104%.
Additionally, President Donald Trump revealed on Tuesday that he would soon introduce a “major” tariff on pharmaceutical imports. Also supporting gold is news that the World Gold Council reported gold-backed ETFs saw inflows of 226.5 metric tons, worth $21.1 billion, in the first quarter. This is the largest inflow in three years.
In addition, there was some support due to a lower U.S. dollar.
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