Written Commentary
GOLD
Gold futures fell lower as the US-Japan trade deal lifted investor sentiment, while a firmer dollar and higher Treasury yields added further pressure. The trade agreement between the US and Japan will see Japan face a 15% tariff rate, lower than the 25% planned in the tariff letter, while Japan will invest $550 billion in the US. Importantly too, Japanese autos will face a reduced 15% tariff, down from the 25% tariff that the US currently has in place. The US also struck deals with Indonesia and the Philippines, both of which will face 19% tariffs and open their markets up more to US goods. The deals boosted hopes that deals with other countries, including the EU and India could follow.
US Commerce Secretary Howard Lutnick said on Sunday he was confident the US can secure a trade deal with the European Union, but that the August 1 deadline is a hard deadline for tariffs to kick in. Elevated inflation expectations and strong economic data have weighed on expectations over the number of Fed rate cuts this year. Fed Governor Christopher Waller last week reiterated his call for a rate cut later this month, despite data showing ongoing resilience in the US economy and other officials pushing to keep rates steady. Investors now await upcoming remarks from Fed Chair Jerome Powell and Governor Michelle Bowman, seeking clearer signals on the central bank’s policy outlook.
Strong central bank demand will continue to support gold prices. A recent World Gold Council survey showed global central banks expect to increase their gold holdings and are on track to buy 1,000 metric tons of gold in 2025, well above the previous decade’s average of 400–500 tons. Several African nations, like Namibia, Rwanda, Uganda, and Madagascar, have also announced plans to expand their gold reserves.
COPPER
Copper futures are higher, with September contracts hitting their highest level since July 8 as the US-Japan trade deal boosted sentiment, bringing US COMEX copper’s premium over LME copper to over $2,900 a ton. Sentiment was also lifted after Treasury Secretary Scott Bessent said he would soon meet top Chinese officials to extend the two countries’ trade truce, saying he expects the two economic powerhouses to work together on issues like manufacturing and oil. Chinese and US officials are set to meet in Stockholm next week.
Gains in copper were limited over concerns of surpluses in the market. The global refined copper market showed a 97,000 metric tons surplus in May, compared with a 80,000 metric tons deficit in April, the International Copper Study Group (ICSG) said in its latest monthly bulletin. For the first 5 months of the year, the market was in a 272,000 metric tons surplus compared with a 273,000 metric tons surplus in the same period a year earlier, the ICSG said. The US is expected to begin using up the stockpile of copper it built ahead of the tariff announcement before importing from abroad, which could make demand look a bit weaker for that period of inventory rundown.
China’s industry ministry pledged to stabilize growth in key sectors such as machinery, autos, and electrical equipment. China’s GDP grew 5.2% during April-June, slightly lower than the 5.4% in the first quarter, with first-half 2025 GDP growth at 5.3%. Traders are focusing on how China will deal with overcapacity in its industrial sectors for further guidance on copper demand in the world’s largest copper consumer.
New home sales data alongside weekly jobless claims are released Thursday, followed by June durable goods figures on Friday. The data will be watched for signs of any economic fallout from President Trump’s tariffs, although recent data has shown that the economy is holding up relatively well with a limited impact on prices for the time being.
SILVER
Silver futures are higher, hitting their highest level since 2011 as technical and industrial support contributed to gains. Silver’s supply-demand fundamentals also remain favorable as the market is expected to remain in a deficit for the fifth straight year. Silver has found support from China in recent days, after the industry ministry pledged to stabilize growth in key sectors such as machinery, autos, and electrical equipment. The initiative aims to modernize production and is expected to boost demand for metals. The action plan also covers 10 major industries, including steel, nonferrous metals, petrochemicals, and construction materials.
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. South Korea’s exports rebounded in June largely on brisk semiconductor shipments, indicating the importance of and demand for the technology, despite challenges from higher US tariffs weighing on global trade. Recent data highlights this trend: China significantly increased 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.
Interested in more futures markets? Explore our Market Dashboards here.
Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM. The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared. The information provided is designed to assist in your analysis and evaluation of the futures and options markets. However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.
