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Daily Base Metals Report

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Research Associate

Contact research Contact Industrial Commodities

US Resilience Under Spotlight

Summary

  • Weaker market sentiment failed to weigh on the dollar, which remained resilient amid inflation concerns due to Trump’s tariffs.
  • Copper rallied as tariff fears trickled through the speculative side of the market.
  • Gold surged to new highs, while oil prices edged higher amid ongoing geopolitical risks.

 US stocks declined after the opening as the University of Michigan Sentiment survey came in weaker than expected, reflecting growing concerns that inflation could reaccelerate due to the impact of Trump's tariffs. Labour market data was mixed, with job growth slowing more than anticipated in January following strong gains in the previous two months. However, the unemployment rate remained at 4.0%, which may reinforce the Fed's cautious stance on rate cuts, likely delaying any monetary easing until at least mid-year. Markets have also been influenced by the growing sentiment that Trump might announce additional tariffs soon. As a result, the dollar index surged, testing the 108.0 level, while the 10-year US Treasury yield rebounded, once again approaching 4.5%.

In the LME space, copper rallied today, breaking above the robust 200-day moving average of $9,453/t to test the highs of $9,500/t. We believe that speculative players drove the momentum, particularly given the sustained gains seen in COMEX, which have further widened the COMEX/LME arb. Furthermore, the absence of any concrete tariff announcements in the metals sector indicated that fundamentals did not entirely drive the market's momentum, and instead, speculators took control. The next robust level of resistance for copper is now at $9,500/t. However, we expect markets to struggle above this level in the meantime, as today's gains have pushed copper closer to the overbought territory. We expect a slight correction in copper prices, bringing it down to around $9,200/t in the near term.

Gains in copper were reflected in other metals, albeit with marginal gains, as individual resistance levels hindered further gains. Aluminium tested the $2,650/t resistance but struggled above it, pulling back to $2,628/t/t. Similarly, lead and zinc strengthened marginally, with lead once again approaching the $2,000/t resistance. Zinc closed at $2,840/t.

Gold recovered from yesterday's pullback, breaking new record highs and trading at $2,880/oz. Silver followed, rising to $32.4/oz at the time of writing. Oil prices climbed steadily, with WTI at $70.7/bbl and Brent crude at $74.3/bbl.

Lme Metals Price And Volume 07022025

All price data is from 07.02.2025 as of 17:30

Disclaimer

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.

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