March Copper Futures New Multi-Months Highs

COPPER

March copper futures advanced to new multi-month highs in light of ongoing concerns that U.S. President Donald Trump could impose tariffs on copper, following his previous 25% tariffs on steel and aluminum. Tariffs could raise the premium U.S. buyers would pay over LME prices, adding further strains to the global supply chain.

Also, recent data showed traders increased their net long positions in copper for the sixth straight week, reaching the highest level since early November. Strong manufacturing activity in the U.S. and expectations of additional economic stimulus in China, the world’s top copper consumer, also fueled the bullish outlook for the red metal.

GOLD

April gold futures are higher despite the bearish interest rate implications of this morning’s January producer price index report. The producer price index in January on a month-to-month basis increased 0.4% when up 0.3% was expected, and the producer price index on an annualized basis advanced 3.5% when a gain of 3.2% was anticipated.

Futures continue to be supported by funds flowing into safe haven assets in the face of escalating trade tensions and growing economic uncertainty. The White House revealed on Wednesday that President Trump’s reciprocal tariffs could be introduced as early as Thursday, following his earlier decision to implement a 25% tariff on steel and aluminum imports. This move builds upon existing tariffs, including 10% on Chinese goods and 25% on imports from Canada and Mexico, though the latter is currently suspended.

Central bank demand for gold remains strong, with the People’s Bank of China adding to its reserves for a third consecutive month in January, according to official data.

SILVER

March silver futures are lower and remain in a 10-day trading range. Before entering this congestion pattern silver prices were supported by expectations of steady demand in the electrification sector, which counterbalanced market beliefs that the Federal Open Market Committee may be slow to add to accommodation this year.

Meanwhile, new data revealed China added 357 gigawatts of solar and wind power in 2024, key uses of industrial silver. On the solar front, India’s Oil and Natural Gas Corp committed to investing INR 1 trillion in wind and solar power by the end of the decade, while Indonesia promised to add 17 gigawatts of solar energy through state-owned enterprises. However, recent U.S. inflation data put downward pressure on expectations of Federal Reserve interest rate cuts, which increases the opportunity cost of holding precious metals.

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