1. Metals Outlook
  2. Daily Base Metals Report

US stocks started the week on the back foot as bonds and the dollar reversed last week’s trends. The dollar shot up higher to the 103.70 level, and the 10-year US Treasury yields came back up to 4.30%. Friday’s comment from the Fed’s Powell helped to reverse the sentiment over the weekend; however, we believe that the market is oversold, and this should eventually balance out. There seems to be a battle between policymakers and the markets, with the former attempting to stop investors from speculating on the path of cuts. By lowering the yields, markets are doing the work of the Fed by reflecting several next year’s cuts already in November. We expect that this is slightly premature, and yields should edge slightly higher in the medium term. The macro calendar is quiet this week, with US factory orders and labour data, which we do not see impacting the markets too much. With the blackout period from the policymakers, we expect volatility to die down and markets to trade in a narrower range this week.

A stronger dollar drove a strong risk-off sentiment across the base metals complex, with metals coming off aggressively overnight, giving up most of the gains they made on Friday. On copper, today’s correction seems like a slight retracement on November’s trend, and with the trend support remaining intact, prices are likely to remain elevated above $8,400/t in the meantime. Aluminium continues to test the $2,200/t level, closing slightly below it at $2,182/t. Lead’s downside has been relentless, pushing prices below another robust support of $2,100/t to settle at $2,093.50/t. Zinc is also seen creeping lower, settling below the $2,450/t level at $2,453/t. We expect that with the end of the year approaching, the market will be in a de-risk mode.

Oil futures continued to edge lower, with WTI and Brent now trading at $73/bl and $78/bl, respectively. Gold breached a record high of $2,100/oz this morning, however, struggled to keep these levels, selling off to $2,025/oz. We see that there is still little fundamental incentive to push gold above this level decisively – the confirmation of an actual cut from policymakers might prompt gold higher. But in the meantime, we expect it to test the $2,100/oz resistance in the near term.

Lme Metals Price And Volume 04122023

All price data is from 04.12.2023 as of 17:30


This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

This report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Accordingly, the information may have been acted upon by us for our own purposes and has not been procured for the exclusive benefit of customers. Sucden Financial believes that the information contained within this report is already in the public domain. Private customers should not invest in these products unless they are satisfied that the products are suitable for them and they have sought professional advice. Please read our full risk warnings and disclaimers.

Sign up to get the latest market insights

We will email you each time a new report has been published.