Edward Meir's Week in Review for AMU: Jan. 18, 2026

Base and precious metals

In the base metal space, copper ended down 1.5% last week. Prices settled back below $13,000/ton on the LME. CME high-grade copper ended at $5.78/pound on Friday, down about eight cents on the week. Nickel ended off by almost 1%. And although zinc and tin each ended up by 2% and 5%, respectively, they were both off considerably from their intraweek peaks. In the ferrous markets, the tone was steadier. US steel prices ending slightly higher. Chinese values finished mixed.

In precious metals, although prices finished mostly higher, there were large selloffs from higher intra-week peaks. Gold tacked on $95/ounce to finish at just below $4,600. It got to a record high of $4,650/ounce before retreating. Silver ended the week up by almost $9/ounce at $88.53. But at one point it was up by $14/ounce and in fresh record territory. Platinum ended with only a modest gain. Palladium finished lower.

Energy

In the energy space, crude oil finished the week just about flat at $59.33 basis WTI. Prices ran up to over $62/barrel at one point. But they sold off sharply after President Trump announced that he would not be taking military action against Iran (for now). He was apparently being assured through intermediaries that Iranian protesters who were arrested would not be executed.

The situation has calmed down significantly over the last few days. But tensions remain high. A US aircraft carrier is on its way to the Persian Gulf from the South China Sea. And so the prospect for future strikes cannot be ruled out. Meanwhile, Tehran is blanketed with security forces, scaring off demonstrators and rendering the streets quiet. The internet remains down, and so it is hard to know what is going on or how many people have been killed. Estimates run into the thousands.

In the product complex, gasoline gained about $0.02 on the week. Diesel ended with a $0.10 gain. Natural gas closed about six cents/bcf lower, ending at $3.10. A rally to the mid-$3 level disintegrated despite cold weather blanketing much of the US Northeast and Midwest. “This is the first time in a few months weather trends and prices are not correlated,” NatGasWeather.com said in a note, citing rising output and comfortable inventories as offsetting factors. On the inventory side, the latest EIA report showed gas stocks drawing by 71 Bcf, leaving inventories 3.4% above the five-year average.

Equities

US equity markets endured a choppy and modestly negative week. Early record highs in the S&P 500 gave way to a broad pullback. The index finished the week down 0.4%. The Dow ended off 0.3%. The NASDAQ declined 0.7%.

Semiconductor stocks stood out as a notable exception to the broader weakness in technology shares. Strong earnings from Taiwan Semiconductor kept chipmakers well bid. Real estate, consumer staples industrials, energy, and utilities all finished the week higher. They offset weakness in consumer communication services, healthcare, and financials. The latter was particularly weak on White House proposals to cap credit card interest rates at 10% a year. Not surprisingly, this is meeting fierce resistance from both banks and credit card companies. It will likely not go anywhere anyway given that it will need congressional approval.

US treasury prices finished the week on a lower note, sending yields on five- and 10-year paper to their highest levels since late August. The two-year yield settled at 3.60% (+6 bp on the week), while the 10-year yield settled at 4.23%, (both up six basis points on the week).

Trade tensions

This week is going to kick off with trade tensions very much front and center. In this regard, President Trump said on Saturday that he would impose 10% tariffs on imports from several European countries starting on Feb. 1 in an effort to pressure Denmark to sell Greenland. More alarmingly, the tariffs would increase to 25% on June 1 and would remain in place until a deal is reached for what Trump called the “complete and total purchase” of the territory.

In another bizarre twist, European nations are sending military assets to Greenland to deter any potential US aggression. More relevant to us is what will happen to the recently negotiated EU/US trade deals, which saw the US lower tariffs to 15% for most goods from the EU and to 10% for those from the UK in return for European energy purchases and investments into the US. Should additional tariffs materialize, they very well could undermine these deals. In fact, the European Parliament has yet to formally sign off on the trade accords. A spokesman for the Parliament said it might not do so “until the US ends its threats.”

In another notable trade development, Canadian Prime Minister Mark Carney wrapped up a visit to China last week where he and Chinese President Xi agreed on a “new strategic partnership”. Among other items, the pact would allow 50,000 Chinese EVs to be imported into Canada at a preferential duty rate of 6% (down from 100%). And China will lower its duties on Canadian canola to 15%.

USTR Jameson Greer told CNBC that what Canada agreed to is “problematic.” He said the US “is always going to have an outsized role in the [Canadian] economy.” Ontario Premier Doug Ford also came out against the Carney/Xi deal. Ford said allowing Chinese EVs into Canada “risks closing the door on Canadian automakers to the American market [and would] hurt our economy and lead to job losses.” This very well could be true, especially if the Trump administration decides to retaliate with yet another round of tariffs on Canadian imports.

Finally on trade, the Trump administration said last week that it will be holding off on imposing new tariffs targeting imports of critical minerals and will be pursuing bilateral supply agreements instead to “ensure the United States has adequate critical mineral supplies and to mitigate the supply chain vulnerabilities as quickly as possible.” However, the administration wants to have a minimum floor on imports as opposed to percentage-based duties so as to help develop domestic supply chains. The metals involved here are primarily rare earths and uranium. That said, copper recently made the list, and so we will see how the proposed 2027 tariffs on products will be impacted by this new ruling.

Macro readings and other metals news from the past week

• We came across an interesting story from Bloomberg noting that the average US retail price for electricity was up by 7.4% in September for its biggest monthly advance since December 2023. Residential prices have jumped even more, up by 10% between January and August. In response, President Trump and the governors of several Northeastern states are apparently considering a plan to authorize a main US electricity provider—PJM Interconnection—to hold an auction whereby tech companies will bid on 15-year contracts for new electricity capacity. “If the auction proceeds as envisaged, tech giants would pay for power over the duration of the contracts, whether they use the electricity or not, providing secure revenues for years in a market notorious for price volatility and generator bankruptcies,” Bloomberg notes. The money received would also finance the construction of some $15 billion worth of new power plants. Oddly, PJM was not present at a White House event where the announcement was made. A spokesman told Bloomberg: “We were not invited.”
• December CPI inflation was up by 0.3% month-over-month after increasing by 0.2% in November. Core CPI was up 0.2%, unchanged from the 0.2% increase seen in November as well. On a year-over-year basis, total CPI was up 2.7% versus 2.7% in November, while the annualized core CPI was up 2.6%, also unchanged from November. Both numbers were in line with estimates. Among the inflation categories, the food and shelter indices were up by 2.7% and 3.2% year-over-year, respectively. The energy component was up 2.3%. The services component (less rent) was up 3.4% y-o-y. The latter is an indicator that Federal Reserve Chairman Jerome Powell is particularly fond of.
• November PPI came in at 0.2%, in line with estimates. The prior reading was revised to 0.1% from 0.3%. The core rate came in unchanged (better-than-expected). But the prior reading was revised higher. However, the more important year-over-year PPI reading increased to 3%. And so both the CPI and PPI annualized rates remain stubbornly above the Fed’s 2% target.
• December existing home sales rose to 4.35 million (consensus 4.15 million) as sales increased across all regions. October new home sales came in at 737,000, pretty much unchanged from the month prior. Sales in the South—the nation’s largest housing sector—were the sole source of strength in October. Home sales declined in all other regions, with higher home prices and mortgage rates acting as headwinds. Separately, the weekly MBA mortgage applications index soared by 28% in the latest week, up from a decline of nearly 10% in the week prior.
• November retail sales surprised positively, up 0.6% (consensus 0.4%). The ex-auto reading came in at 0.5% (consensus 0.3%). There were increases across most discretionary spending categories. The end of the government shutdown may have also spurred some spending.
• The Fed’s January Beige Book described economic activity as having increased at a modest pace in eight reporting districts. Three districts saw no change. And one reported a modest decline. Consumer spending increased during the holiday season. But much of the spending emanated from higher-income consumers. Auto sales were little changed, and manufacturing was mixed. Residential real estate activity softened as employment was little changed.
• December industrial production rose by 0.4% (consensus 0.2%). Just as encouraging, the November manufacturing reading was revised higher to 0.4% from the previous 0.2%.
• US aluminum imports rose to about 365,000 tons in October, up by 9.6% month on month but still 18% lower year on year. Canada shipped 170,000 tons in, 9.3% higher month on month, but almost 40% lower year on year. The UAE supplied nearly 34,000 tons, a 21% increase over September. South Korea exported 23,400 tons, virtually unchanged month on month but 37% higher year on year. Surprisingly, despite steep tariffs, China sent in 18,500 tons, triple the amount it exported in September. Despite the month-over-month import increases now seen in both September and October, especially for Canadian aluminum, Midwest premiums are showing no signs of easing. They have now almost reached $1.00/pound—a staggering 62% of the LME aluminum cash price
• Reuters reports that Panama’s government will decide on the future of the Cobre Panama copper mine by June, this according to the country’s president.
• Reuters also reports that the Atlantic Alumina Company said the US Department of Defense and a Pinnacle Asset Management affiliate (Concorde Resources) have invested more than $450 million in the company to boost domestic output and build the US’s first primary gallium production facility. The US government has invested $150 million in preferred equity, while Concord has put in more than $300 million in private capital.
• Reuters in addition reports that Indonesia may approve a nickel ore production quota of around 260 million metric tons this year, lower than projected demand of around 340 million to 350 million tons. The plan has yet to be finalized but is being considered as the government tries yet again to control output. All Indonesian miners are required to submit their annual production plan to the mining ministry.
• Separately, Reuters reports that the Indonesian Tin Exporters Association estimates this year’s tin mining production quota will be set at around 60,000 metric tons, according to the association’s chair. The production quota for 2025 was 53,000 tons and was 45,000 tons in 2024. So the 60,000 ton figure, if indeed reached, is certainly not restrictive.
• The World Bank is expecting the global economy to grow by 2.6% this year, slightly lower than its 2.7% estimate for 2025. It predicts US GDP to grow by 2.2% in 2026, compared to 2.1% in 2025 as bigger tax incentives should offset the tariff drag on investment and consumption. China’s growth should slow to 4.4% in 2026 from 4.9%. But forecasts are up from previous estimates due to expectations of increased fiscal stimulus and a higher level of exports to non-US markets. Growth in the Eurozone is set to slow to 0.9% in 2026 from 1.4% in 2025 due to the drag from tariffs. But EU growth is set to recover to 1.2% in 2027 on account of higher defense spending. Japan’s outlook is lackluster for 2026, with growth slowing to 0.8% after a rise of 1.3% in 2025.

This week’s US macro readings

US bond and equity markets will be closed on Monday for Martin Luther King Jr. Day. We will get no readings on Tuesday either. On Wednesday, we get December pending home sales (expected at 1%, last 3.3%). Thursday brings us weekly initial jobless claims (expected at 208,000, last 198,000), followed by the first revision of Q3 GDP (unchanged at 4.3%). We also get delayed personal income and spending reports for November on Thursday (expected at 0.4% and 0.5%, respectively unchanged from the previous month) followed by the delayed PCE November PCE report (expected at 0.2%, last 0.3%). The core PCE is expected to rise by 0.2% (last 0.2%). But we don’t see any estimates for the year-over-year readings (previously coming in at 2.8% in both categories.) On Friday, we get January consumer sentiment readings (expected at 54, unchanged from the month prior) followed by the S&P flash services and manufacturing PMI.

We wish all our readers a pleasant week ahead!