GOLD
February gold futures are higher as traders look ahead to the Federal Reserve’s two-day policy meeting starting later today. Traders will be focusing on Powell’s speech and how the central bank will react to President Donald Trump’s push for interest rate cuts. Investors are hopeful that Powell will not provide overly hawkish guidance, especially after the latest consumer price index data showed signs of easing inflation.
The Federal Open Market Committee is widely expected to keep its fed funds rate unchanged at 4.25% to 4.50% at the conclusion of tomorrow’s policy meeting It now looks as though the FOMC will cut its key rate at either it’s May or June policy meeting, which supports the outlook for non-interest-bearing assets like gold.
In the longer term view, the precious metal remains supported by expectations of continued central bank buying.
SILVER
March silver futures are higher despite a stronger U.S. dollar. Recent pressure on silver was linked to growing tariff threats from U.S. President Donald Trump. President Trump announced plans to impose tariffs on imports of chips, pharmaceuticals, steel, aluminum, and copper to boost domestic production. Traders were also on edge ahead of the February 1 deadline for the first round of tariffs targeting China, Mexico and Canada, as previously announced.
In addition, investors are bracing for the U.S. Federal Reserve’s policy decision tomorrow, with expectations that interest rates will remain unchanged.
Meanwhile, overcapacity in China’s solar panel industry prompted photovoltaic companies to join a government-led self-discipline program, which is anticipated to dampen silver demand from one of its major sectors.
COPPER
March copper futures are higher, recovering some of the losses from the previous session, despite new tariff warnings from U.S. President Donald Trump that could disrupt global commodity markets. President Trump announced plans to impose tariffs on imports of chips, pharmaceuticals, steel, aluminum and copper in an effort to strengthen domestic production.
Traders remained cautious as the February 1 deadline for the first round of tariffs on China, Mexico, and Canada lies ahead, as previously outlined by the President Trump. Meanwhile, investors are preparing for the U.S. Federal Reserve’s upcoming policy decision, which is expected to keep interest rates unchanged. Trading volumes are anticipated to be lower, with Chinese markets closed for the week-long Lunar New Year holiday.
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