1. Metals Outlook
  2. Daily Base Metals Report

US stocks opened on the front foot after inflationary data came out softer than expected, offering hope that the Fed might wrap up its tightening cycle soon. US CPI grew by 3.0% y/y in June, marking March 2021 lows; core inflation has also surprised on the downside, growing by 4.8% y/y, vs the expected 5.0%. This suggests that cooling in overall performance is translating into marginal softness in core prices; while we still struggle to see core inflation reach the Fed’s target of 2% this year, a 50bps jump lower from a month before marks the fastest pace of cooling during the entire tightening cycle. While the case for a hike in September has diminished to 4bps, markets reaffirmed their stance for a July 25bps move, suggesting that data is no longer playing a key role in driving sentiment for the upcoming meeting. Yields still weakened across the board, and the dollar breached the robust 100.80 level to trade at March 2022 lows of 100.60.

Base metals, in line with other commodities, benefitted from a sharp dollar correction, with solid gains seen across the board. Tin, in particular, gained 3.8% back to test the recent highs of $29,000/t; the metal closed above this level at $29,069/t. Aluminium also saw protracted gains back above $2,200/t to close at $2,236/t. Likewise, copper breached resistance of $8,400/t to close at $8,499.50/t – the high not seen since early June. Lead and zinc rallied to close at $2,085.50/t and $2,425.50/t, respectively.

WTI and Brent strengthened into $75/bl and $79/bl. Gold and silver rallied back to $1,950/oz and $24.00/oz levels, respectively.

All price data is from 12.07.2023 as of 17:30


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