1. Metals Outlook
  2. Daily Base Metals Report

US stocks opened higher today, boosted by a significant decline in 10-year US Treasury yields following data indicating some softening in the labour market. The ADP Employment Change, which estimates monthly changes in non-farm private employment based on payroll data, came in lower than expected for June, showing 150k new jobs added compared to the expected 165k. Additionally, last week's jobless claims were higher than anticipated, with initial claims reaching 238k—the highest level since January. The data was interpreted as a sign of weakness in the labour market, leading investors to increase their expectations for the first Fed interest rate cut in September. Forward swaps are now pricing in more than an 80% chance of a 25bps rate cut at the start of Q4. The dollar index plunged, trading at 105.1, while the 10-year US Treasury yield dropped to 4.34%.

Stronger gains were seen across the base metals complex today. While the upbeat mood drove this morning's upside, a weaker dollar further supported the appetite for higher prices later in the day. We believe the dollar was oversold today, possibly exaggerating the market response to weaker US economic readings. We expect the currency to increase slightly in the near term, reaching above 105.40. For the rest of the week, a greater focus will be paid to performance outside the US, particularly in the UK and France. As a result, if the positive sentiment among base metals continues tomorrow, we expect only a marginal price increase. As a result, copper strengthened to $9868/t, as aluminium tested the resistance at $2 550/t. The rest of the complex followed suit: lead and zinc edged higher, as nickel defended the $17,000/t level.

As the dollar and Treasury yields declined, precious metals appreciated today. Gold surpassed the 50-day moving average, trading at $2,364/oz, while silver jumped above $30/oz, reaching $30.6/oz. Oil softened slightly, with WTI and Brent crude at $82.5/bbl and $86.0/bbl, respectively.


All price data is from 03.07.2024 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.