Written Commentary
GOLD
February gold futures are lower today extending yesterday’s declines. Recent pressure can be linked to uncertainty over the size of potential Federal Reserve interest rate cuts next year.
COPPER
March copper futures are lower, continuing the decline from the one-month high reached the previous day, driven by increased pessimism about manufacturing demand in China. Credit data for November from the world’s largest copper consumer fell significantly short of expectations, revealing that demand for financing had not responded to the People’s Bank of China’s aggressive monetary stimulus.
In addition, copper prices were pressured by the expectation of a weaker yuan from China.
SILVER
March silver futures are lower today after yesterday’s one-day reversal to the downside. Silver prices dropped below $31 per ounce, falling from a one-month high in the previous session. This decline was driven by uncertainty surrounding Chinese industrial demand, which outweighed support for the metal from dovish policy moves by central banks.
In response to U.S. tariff threats, China is considering devaluing the yuan, aligning with its commitment to easing monetary policy, which puts pressure on silver’s price outlook, especially considering China’s position as the world’s leading exporter.
Additionally, China’s solar panel industry is facing overcapacity, prompting photovoltaic companies to join a government self-discipline program that may regulate supply, which could dampen future demand for silver.
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