1. Metals Outlook
  2. Daily Base Metals Report

US stocks started the day on a positive note following a sell-off in the dollar, which was triggered by retail sales data indicating a more significant-than-anticipated drop in consumer spending for the month. Although spending trends tend to vary seasonally, with February often experiencing a dip following a robust January, the recent retail sales figures prompted investors to offload the overbought dollar from Monday. The dollar index declined to 104.40, while the 10-year US treasury yield edged lower to 4.23%. We expect the greenback to depreciate further in the coming days and stabilise around the 104.0 level. Elsewhere, the UK GDP print pointed to a stronger-than-expected contraction in economic activity, with the Q4 figure at -0.2% YoY compared to 0.3% recorded in the previous quarter. While the economy has entered a technical recession, persistently elevated inflation leads investors to stick to their expectations of no interest rate cuts before H2 2024.

Base metals performance was a mixed bag once again, with prices that deviated outside of the trading range in recent days now seen coming back in line with the mean. In particular, mean reversion and a softer dollar prompted copper prices to jump back above the $8,300/t level; we expect prices to edge higher to the $8,380-8,400/t area as prices equalise. Likewise, lead and zinc are now edging higher following the recent sell-off, breaking above the recent resistance at $2,050/t and $2,350/t, respectively. Aluminium remained rangebound at $2,226/t, and nickel struggled above the $16,500/t level.

The softening dollar provided a boost to precious metals, causing gold to climb above $2,000/oz once again. Silver, mirroring gold's performance, surged to approach the $23/oz mark. Despite the International Energy Agency's forecasts of a surplus in 2024, oil prices remained unaffected. Both WTI and Brent crude saw gains, reaching $77.9/bl and $82.7/bl, respectively.

Image (12)

All price data is from 15.02.2024 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.