Written Commentary
COPPER
Copper futures are higher, buoyed by the extension of the US-China trade truce and as the dollar lowered following the July CPI report. The 90-day extension of the tariff truce between two of the world’s largest economies has eased concerns about trade friction and is expected to support demand ahead of the seasonal autumn import surge for goods such as electronics.
On the supply side, Chile allowed mining to resume at Codelco’s El Teniente mine, easing shortage fears after a mine collapse caused a halt in operations. Weighing on copper prices are rising stocks in LME-approved warehouses, which at 155,000 metric tons are up more than 70% since late June, while CME warehouse stocks stand abundant at 265,000 tons.
Traders are closely watching the large copper shipments that arrived in the US ahead of broad tariffs. Price spreads between London, New York, and Shanghai will guide metal flows, with US copper futures currently trading about $130/ton above LME prices, narrowing the incentive for exports. Any deviation beyond a $100–$200 spread between CME and LME is likely to trigger shifts in copper movement.
GOLD
Gold futures slipped as traders digested the recent CPI report, which showed that annual inflation held at 2.7% in July, below forecasts of 2.8%, while core inflation accelerated more than expected to 3.1%. Core CPI (excluding food and energy) rose 0.3%, up from June’s 0.2% and the largest gain in six months, reflecting persistent price pressures in shelter, medical care, recreation, and travel. Food prices were flat, as grocery costs dipped slightly while restaurant prices rose. Energy prices declined, led by a 2.2% drop in gasoline, helping to offset broader inflation.
The modest cooling in headline inflation is encouraging, but core inflation remains sticky, especially in services. The underlying inflation trend with core prices will keep the Fed cautious, increasing the stakes of the August labor report. The Fed is likely to interpret this as progress but not victory. With core services inflation still elevated, the central bank may maintain its restrictive policy stance, reinforcing the higher-for-longer narrative, dependent on labor market conditions.
Gold faced sell-off conditions on Monday after President Trump announced that gold would not be facing tariffs, reversing a prior report that had driven futures prices to record highs. Investors will closely monitor key US economic data releases later this week, including PPI inflation and retail sales data, for more clues on the Fed’s rate path.
On the trade front, President Trump signed an executive order extending the tariff truce between the US and China for another 90 days, pushing trade negotiations out to the fall. China also announced the extension of the tariff pause on state media.
SILVER
Silver futures are lower, tracking moves in gold. Silver prices remain supported by a persistent structural supply deficit and strong investor interest. Industrial demand, especially from energy sectors like solar power, EVs, and electronics, continues to grow, with solar alone making up 17% of total demand last year, triple its share a decade ago. Global mine supply has dropped 7% since 2016, contributing to an estimated 800 million oz. shortfall from 2021 to 2025. Investor demand through silver-backed ETPs also plays a major role, with 95 million oz. in net inflows in H1 2025 and over 1.1 billion oz. drawn from mobile inventory since 2019. Despite recent tariff-related headwinds, silver’s long-term outlook remains strong due to its critical role in clean energy technologies, as evidenced by rising solar capacity in China and Europe and resilient semiconductor demand.
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