Commodity Calls: Week Ending 14 February 2025

Chinese central bank purchases more gold, US traders rush to dodge potential copper tariffs, and crude oil recovers on retaliatory tariff reprieve.

Join Global X each week for ‘Commodity Calls’ to explore all the recent signals and developments that occurred in the world of commodities.

Looking for more ETF Express? Check out this week’s Market Moves and Thematic Spotlight.

Gold

Bullish

  • China’s central bank, the People’s Bank of China, has added more gold to its reserves in January.1 The PBOC added 0.16 million troy ounces last month, marking a new 3-month streak of gold buying since it first resumed purchases in November 2024.
  • A new pilot program for insurers in China will allow insurance funds to invest in gold as part of efforts to diversify and optimise their asset allocation.2 Ten firms are taking part in the program which allow them to allocate up to 1% of assets into the precious metal. The program came into effect on February 7.

Bearish

  • Gold fell at the tail-end of last week as investors marked down the chances of tariff-related concerns.3 Trump has shown a tendency to use tariffs as a negotiating tool rather than true income-generating regulations. This means that the likelihood of extreme cases such as his initially proposed 60% tariff against China is lower.

Explore physical gold with GOLD and GXLD. 

Copper

Bullish

  • Markets bid up copper on the COMEX on rising concerns that Trump would impose tariffs on the red metal.4 This has caused a record level disconnected between the US and global prices as traders looked to shift the metal from LME warehouses to the US. CME copper stocks have steadily risen since Trump’s US presidential election win.

Bearish

  • Despite recent Chinese market bullishness, the country’s producer price index remains in deflation and manufacturing PMI continues to contract.5 The last Chinese manufacturing PMI came in at 49.1, which is lower than the score of 50 which marks an expansionary outlook. China’s PPI also came in at -2.3% continuing a 28-month streak of deflation.

Explore copper with WIRE.

Crude Oil

Bullish

  • Trump’s April deadline for studies on the implementation of reciprocal tariffs has been treated as a sign that they will not be actioned immediately.6 This has caused trader sentiment on near-term oil demand to improve, with most perceiving the development as positive for the economy.

Bearish

  • Crude oil prices have fallen on fears of weaker demand due to rising trade tensions.8 Trump’s newly announced tariffs on Chinese imports to the US are raising concerns around the possibility of an extensive trade war.

Explore crude oil with BCOM.

 

Forecasts are not guaranteed and undue reliance should not be placed on them. This information is based on views held by Global X as at 11/02/2025. Investing involves risk, including the possible loss of principal. Diversification does not ensure a profit nor guarantee against a loss.

Brokerage commissions will reduce returns.

This material represents an assessment of the market environment at a specific point in time and is not intended to be a forecast of future events, or a guarantee of future results. This information is not intended to be individual or personalised investment or tax advice and should not be used for trading purposes. Please consult a financial advisor or tax professional for more information regarding your investment and/or tax situation.