Silver Higher on Apple Investment

SILVER

Silver futures are strongly higher, gaining support from the newly announced $100 billion investment into the US from Apple, intensifying industrial domestic demand for silver in the US. President Trump announced a 100% tariff on imported semiconductors and chips, excluding companies that manufacture within the US. The structural supply deficit, and increased investor attention remain supportive of prices as well. Demand, especially from the energy sectors, is not slowing down. The metal is crucial to the technology needed to meet rising global electricity demand, including solar power, electric vehicles, and electronics.

Solar demand alone accounted for 17% of last year’s total, a threefold increase over the 5.6% from a decade ago. Industry data shows that global mine supply has declined by 7% since 2016, contributing to the prolonged structural deficit. It is estimated that the cumulative shortfall during 2021-2025 is almost 800 million oz. Investor demand has also remained favorable for prices, the rise of silver exchange-traded products (ETPs) continues to impact silver demand significantly, as many silver ETPs are backed by actual silver stored in vaults, rendering it unavailable for industrial users. In the first half of 2025, global silver-backed ETPs experienced significant net inflows, reaching 95 million oz. According to the Silver Institute, since 2019, more than 1.1 billion oz. (market balance plus ETPs) have been drawn from “available mobile inventory.” Silver prices will continue to be primarily influenced by investor demand, as the decreased availability will make the metal more sensitive to demand changes.

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.

GOLD

Gold prices ticked higher as growing interest rate cut expectations supported prices. sentiment remains cautious ahead of President Trump’s anticipated Federal Reserve appointments, which could influence the future direction of monetary policy. San Francisco Fed President Mary Daly said Monday that the time for rate cuts is approaching, given mounting evidence of a cooling labor market and no signs of persistent tariff-driven inflation.

Job growth in the past three months was the lowest since 2010, except during the peak months of the pandemic. Hiring has been particularly weak in the sectors most sensitive to tariffs and the ups and downs of the economy. From April to July, payrolls fell in mining and logging, manufacturing, wholesale trade, and retail trade, while hiring has slowed significantly in leisure and hospitality. The weak data spurred markets to increase bets that the Fed will cut rates at its September meeting and beyond. Traders are now pricing in a 94.4% chance that the Federal Reserve will cut rates next month.

Trade tensions continue, with Trump renewing his threat to hike tariffs on Indian goods over the country’s purchases of Russian oil. President Trump last week unveiled new tariff rates, ranging from 10% to 41%, on imports from dozens of countries, which took effect at 12:01 Thursday morning, rekindling global trade tensions and offering support for gold. Trump also confirmed that Indian imports will face an additional 25% tariff, while duties on select Brazilian goods were raised to 50%.

COPPER

Copper prices are higher, continuing to gain support from growing expectations of US interest rate cuts and renewed supply-side concerns following the suspension of a major mine in Chile, the world’s top copper producer. Copper also found support from new data published from China showed that the country’s copper concentrate imports rose 9% in July. China’s copper smelting sector hit a record in production this year; analysts are expecting output to grow 7.5% to 12%.

Trading conditions continue to settle after the White House’s move last week to exclude most copper products from tariffs, only applying tariffs to semi-finished products like wires and pipes, exempting key imports such as ore, cathodes, and concentrates, which make up the bulk of copper inflows. The move pushed US copper prices back to parity with the LME benchmark.

The El Teniente mine ran out of stockpiled ore and had to put its plants, including the Caletones smelter, on care and maintenance, the Chilean state-owned company said Tuesday. About 5,000 workers were brought to the ground-level facilities to check that equipment was not damaged and is ready to restart. El Teniente accounts for over a quarter of Codelco’s output. Codelco must produce four reports on the collapse, according to a government document seen by Reuters on Monday, before it can restart its underground operations there. As long as the ongoing investigation into the mines’ collapse is underway, it is unlikely to restart anytime soon.  Copper prices have not seen a major reaction to the outage so far, as investors are still grappling with US tariffs, although the stoppage remains supportive of copper prices.

Traders will shift attention to the huge volume of copper that has been shipped to the US in anticipation of all-encompassing tariffs. Spreads between prices in London, New York, and Shanghai are likely to determine the direction of metal flows. On Monday, US copper futures on CME Group’s Comex were trading about 1.5%, or $130 a ton, above those on the LME, undercutting the immediate rationale for exports. Any price move outside of a $100-$200 spread between CME and LME copper will likely trigger metal flows.

Long-term gains in copper could also be limited over concerns of surpluses in the market. The global refined copper market showed a 97,000 metric ton surplus in May, compared with an 80,000 metric ton deficit in April. Further weighing on sentiment are signs of weakening global demand, with China’s Yangshan copper premium falling by half since its May peak.

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