Written Commentary
SILVER
Silver futures are higher, driven by strong technical momentum, robust industrial demand, ongoing supply shortages, and increased investor interest–silver broke key resistance levels Thursday, attracting buyers. Silver futures soared over $36 per ounce on Thursday, marking their highest level since February 2012.
Silver is facing its fifth straight year of a structural supply-demand deficit, although the deficit is expected to narrow by 21% in 2025, according to the Silver Institute Industry Association. Silver is largely a by-product of the mining of other metals, meaning an increase in price will not directly drive new supply, which will maintain the deficit for longer.
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. 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
Copper futures edged higher, as bullish sentiment has been driven by supply-side disruptions and tariff speculation. Production delays at Teck Resources’ Chilean operations are expected to persist for several months, while mining activities at the Kamoa-Kakula project in the Democratic Republic of Congo have also been interrupted.
Speculation over a potential tariff on copper continues to provide upward support for the metal. 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. President Trump announced 50% tariffs on aluminum and steel last weekend, adding to speculation that copper will receive a similar fate.
Factory orders dropped sharply in April as the boost from front-loading of purchases ahead of tariffs faded. Data from the Commerce Department’s Census Bureau showed a -3.7% fall after an unrevised +3.4% jump in March. The government also reported that orders for non-defense capital goods excluding aircraft, which are seen as a measure of business spending plans on equipment, decreased -1.5% in April rather than -1.3% as estimated last month. Shipments of these so-called core capital goods fell by an unrevised 0.1%.
Peru’s Energy and Mines Minister Jorge Montero said he expects mining investment for the world’s third-largest copper producer to reach $4.8 billion this year and for copper output to reach 2.8 million metric tons. Last year, Peru produced roughly 2.7 million tons of copper.
GOLD
Gold futures edged lower following May’s labor report, which showed nonfarm payrolls increased by 139,000, beating estimates of 126,000 and lower than April’s figure of 147,000. The reading adds to expectations that the Fed will continue to hold rates until the larger inflation picture plays out, limiting gold’s near-term upside, as gold benefits in a lower interest rate environment. Markets are expecting 50 bps of easing this year from the Fed, with the first rate cut coming at the September meeting.
Investors also sparked a risk-on sentiment following news that President Trump held a long-awaited phone call with Chinese President Xi Jinping, during which both leaders agreed to resume trade negotiations that had previously stalled due to mutual accusations of broken commitments.
Central banks across the globe added a net 12 tons of gold to their reserves in April, albeit at a slower rate of accumulation than in previous months. Several African central banks—including those of Namibia, Rwanda, Uganda, and Madagascar—have recently announced plans to either initiate or expand their gold reserves.
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. Long-term, strong central bank and investor demand remain in favor of gold’s upside.
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