Written Commentary
SILVER
March silver futures declined to a three-month low. This decline was driven by a hawkish stance from the Federal Reserve and a weak outlook for silver’s industrial demand. The Fed’s projection of fewer rate cuts next year suggests the Federal Open Market Committee is responding to persistently high inflation and potential inflationary risks from the combination of expansionary fiscal policy and tariffs under the incoming Donald Trump administration.
This fueled concerns about reduced demand for silver in industrial applications, causing it to lag behind gold in price performance during the fourth quarter. In addition, overcapacity in China’s solar panel sector led photovoltaic companies to join a government self-regulation program, potentially curbing silver demand.
GOLD
February gold futures declined following the Federal Reserve’s hawkish stance on fewer interest rate cuts in 2025, with its dot plot projections indicating only two interest rate cuts, supported by strong gross domestic product growth and persistent inflation.
A Federal Reserve that is likely to ease credit conditions next year at a slower pace has dampened gold demand, since limited monetary easing makes non-yielding assets like bullion less attractive to investors.
Underlying support for gold remains due to safe-haven demand and significant central bank purchases.
COPPER
March copper futures dropped toward $4 per pound on Thursday, continuing their recent decline as the U.S. dollar and Treasury yields increased following the U.S. Federal Reserve’s widely expected quarter-point rate cut on Wednesday.
Persistent economic uncertainty, along with a lack of clear policy details from China, which is the world’s largest copper consumer, also put pressure on copper and other industrial metals.
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