Copper Nears Record Highs as Metals Face Mixed Signals

Tashkent, Uzbekistan (UzDaily.uz) — The metals market has once again split into two distinct stories over the past week. Precious metals have been volatile: geopolitical tensions and rising oil prices should support demand for safe-haven assets, while higher oil prices are also increasing inflation risks and raising the possibility of tougher action by the US Federal Reserve. Industrial metals look more resilient, with low inventories, supply disruptions and steady demand from the energy sector, infrastructure and artificial intelligence remaining the key drivers.

Gold is trading at around US$4,390 an ounce, while silver is holding near US$66 an ounce. Both metals remain influenced by conflicting market signals. Expectations of a softer Federal Reserve policy initially provided support at the start of the week, but strong US labor market data and rising oil prices subsequently revived expectations of a rate hike in September. For gold and silver, this is an unfavorable combination: safe-haven demand remains in place, but higher yields and a stronger dollar are limiting their upside potential.

US inflation data have now become the main focus for precious metals. Investors are awaiting producer and consumer price data to assess how seriously the Federal Reserve may be prepared to tighten policy at its upcoming meeting. If inflation proves persistent, gold and silver could again come under selling pressure. If the data are softer than expected, the market may have grounds to restore some demand for safe-haven assets.

Platinum and palladium also remain highly volatile. Platinum is trading at around US$1,830 an ounce, while palladium is near US$1,350 an ounce. Platinum is showing greater resilience due to expectations of a supply deficit and demand from hybrid vehicles, where platinum-group metals are still required for catalytic systems. Palladium is performing more weakly: over the longer term, it continues to face pressure from the growing share of electric vehicles and the gradual substitution of palladium with platinum in automotive catalysts.

Copper has once again become the main story in the industrial metals segment. Prices have risen above US$6.70 a pound, effectively returning to record levels. The market is being supported by several factors at once: expectations of possible US import tariffs, a flow of metal into US inventories and declining available supply in other regions. Long-term demand from data centers, power grids, artificial intelligence and the energy transition is providing additional support. As a result, even after periodic pullbacks, copper remains one of the strongest-performing metals of the year.

Zinc also remained among the weekly leaders. Its price rose to nearly US$4,000 a ton, the highest level in more than four years. In this case, the market is responding not to attractive long-term narratives but to an actual shortage of readily available metal. LME inventories are declining, the share of canceled warrants remains high, and disruptions at mines and producers are reinforcing the perception of a tight market. In such conditions, buyers are seeking to secure their requirements in advance, providing additional support for prices.

Anna Bodrova,
Analyst, Alpari