Gold and silver prices were in the red on Tuesday as investors remained on the edge before the release of a string of key US economic data.
Over the past week, precious metals have experienced significant volatility, as prices retreated from all-time highs due to a combination of profit-taking and excessively bullish positioning.
Meanwhile, oil prices gained due to fears of supply disruptions amid ongoing tensions between the US and Iran.
Base metal prices are softer, primarily due to a slight strengthening of the dollar and diminished Chinese demand.
The weaker buying from China is anticipated as the country nears a significant holiday period.
Gold and silver slips
After two days of positive movement, gold and silver both slipped on Tuesday ahead of US jobs data later this week.
Heightened volatility was also triggered by uncertainty surrounding US monetary policy, particularly with a potential leadership change looming at the Federal Reserve.
Safe-haven demand for precious metals fluctuated due to conflicting developments concerning US-Iran relations.
Despite some progress reported in weekend talks regarding Iran’s nuclear program, the US government issued a security warning on Monday for US-flagged vessels navigating the Strait of Hormuz.
Although gold and other precious metals regained some of their recent losses, they are still significantly lower than their late-January high points, as traders seem hesitant to purchase with the same vigour.
Even as prices fell, gold on COMEX was near $5,100 per ounce at the time of writing.
Silver was down 1.4% at $81.118 an ounce from the previous close.
This week’s central focus will be on significant US economic data releases, which will provide further insight into the health of the world’s largest economy and, crucially, the future direction of interest rates.
Key data points are scheduled throughout the week. December’s retail sales figures will offer a better understanding of consumer spending trends, particularly in light of the emerging difficulties in the labour market.
Furthermore, important labour market and inflation indicators are expected, with the January nonfarm payrolls report due on Wednesday and the latest Consumer Price Index (CPI) to be released on Friday.
Given the Federal Reserve’s primary focus on both inflation and labour market strength, both the jobs and inflation reports are anticipated to heavily influence the Fed’s upcoming interest rate decisions.
Oil gains slightly
Tensions between Washington and Tehran kept the focus on the potential for supply disruptions in the Strait of Hormuz, especially following US guidance for transiting vessels; this attention led to a slight increase in oil prices on Tuesday.
“The market is still focused on the tensions between Iran and the US,” Tamas Varga, oil analyst at brokerage PVM, was quoted in a Reuters report.
But unless there are concrete signs of supply disruptions, prices will likely start going lower.
Oil prices increased by over 1% on Monday following an advisory from the US Department of Transportation’s Maritime Administration.
This advisory urged US-flagged commercial vessels to avoid Iranian territorial waters as much as possible and to refuse, if asked verbally, permission for Iranian forces to board.
The Strait of Hormuz, which lies between Oman and Iran, is a critical chokepoint through which approximately one-fifth of the world’s globally consumed oil passes.
Consequently, any escalation in this region poses a significant threat to global oil supplies.
Most of the crude oil from Iran and fellow OPEC members—Saudi Arabia, the United Arab Emirates, Kuwait, and Iraq—is exported via this strait, with Asia being the primary destination.
Despite Iran’s top diplomat stating last week that Oman-mediated nuclear talks with the US had a “good start” and were scheduled to proceed, the guidance was still issued.
According to a note from Goldman Sachs analysts on Tuesday, geopolitical factors are supporting prices.
They noted a rise in oil being transported on vessels as buyers look to secure more supply amid heightened uncertainty.
According to a proposal document reviewed by Reuters, the European Union plans to broaden its sanctions against Russia.
For the first time, this extension would target ports in third countries, specifically including those in Georgia and Indonesia that are involved in handling Russian oil.
The price of West Texas Intermediate crude oil was at $64.44 per barrel, up 0.2%, while Brent was 0.4% higher at $69.28 per barrel.
Base metals fall
Copper, aluminium and zinc prices fell on Tuesday ahead of a major Chinese holiday period.
“Although demand for the red metal seems sluggish at the moment, concerns on the supply side are giving some price support at current levels,” Neil Welsh, head of metals at Britannia Global Markets, said in an emailed commentary.
ANZ analysts note in a research report that Chile’s copper industry is struggling with supply challenges.
Declining grades and increasingly difficult operating conditions are making it challenging to sustain current output, let alone boost production to satisfy growing demand.
US copper stockpiles have grown significantly, driven by concerns that US President Donald Trump will implement tariffs on refined copper.
This surge in stockpiles has, in turn, limited the availability of a substantial amount of the metal in the market.
The EU’s Carbon Border Adjustment Mechanism (CBAM), effective Jan 1, prices carbon emissions for goods entering the EU from non-EU countries to promote cleaner industrial production.
This raises concerns for sectors like China’s aluminum industry, one of those covered, due to anticipated higher border costs.
Anxiety in the non-ferrous metals industry stems from uncertainty about the EU CBAM’s future, not just higher costs, according to Welsh.
Key industry questions include: Will indirect emissions from aluminium products be included? Will the CBAM expand to cover other non-ferrous metals?
And third, whether China’s national carbon market can offset the impact of the EU CBAM.
The EU’s Carbon Border Adjustment Mechanism (CBAM) provides a method for companies to mitigate costs by offsetting the carbon charges already incurred in the product’s country of origin against the CBAM fees.
For instance, an aluminium producer that has paid a cost in China’s national carbon market can have that amount deducted from their EU CBAM liability, which many businesses view as a practical cost-reduction strategy.
However, this is complicated by the significant difference in carbon pricing.
In 2025, the average carbon price under the EU Emissions Trading System (ETS) was €75 ($88) per ton, about nine times higher than the approximately 70 yuan ($10) per ton price in China’s national carbon market.
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