Small Increase in Core CPI Supports Metals

GOLD

February gold futures are higher, as traders focused on the bullish December consumer price index excluding food and energy report, which showed a 0.2% increase when up 0.3% was expected. The headline consumer price index showed an increase of 0.4% when up 0.3% was anticipated. This report puts pressure on the Federal Open Market committee to be more accommodative.

In the longer term view, the precious metal remains supported by ongoing geopolitical tensions and expectations of continued central bank buying.

SILVER

March silver futures were higher in the overnight trade and there were additional gains when the bullish December consumer price index excluding food and energy report was released.

Earlier this week, silver faced downward pressure after stronger-than-expected U.S. jobs data reduced expectations for additional interest rate cuts from the Federal Reserve this year. The silver’s value continues to be supported by improving industrial demand, especially in renewable energy technologies and electronics, along with ongoing supply concerns.

Traders are also optimistic that China, the leading consumer of silver, may introduce further stimulus measures to support growth and address deflationary pressures.

COPPER

March copper futures are higher, marking their highest level in over two months. Some of today’s gains can be attributed to today’s decline in the U.S. dollar. New data showed that imports of unwrought copper and copper products to China increased by 18% to 559,000 tonnes in December, which was the highest level in 13 months. This increase suggests greater demand from smelters, which could indicate increased future manufacturing activity.

Additionally, exports from China, the world’s largest producer, also exceeded expectations. This data helped fuel a strong month for base metals, supported by China’s commitment to aggressive economic measures, including both monetary and fiscal policies, to boost consumption in the coming year.

However, gains could be limited by potential new tariffs under the President Trump’s administration.

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