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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

Higher for Longer - For Now 

Summary

  • Higher-than-expected inflation reinforced uncertainty over the Fed’s rate-cut timeline.
  • The widening COMEX/LME arb is helping to maintain the resilience of copper prices.
  • Gold stabilised as the dollar pared gains, while silver tracked base metals higher.

US stocks opened lower today following the release of the latest Consumer Price Index (CPI) report, which showed inflation rising more than expected in January. Headline CPI increased 3.0% year-on-year, accelerating from December’s 2.9% and exceeding forecasts. Core inflation, which excludes food and energy, strengthened to 3.3% from 3.2%, reinforcing the Federal Reserve’s cautious stance on rate cuts. With housing and food costs remaining elevated, the report signalled persistent price pressures, adding to uncertainty over the timing of future monetary easing. Fed Chair Jerome Powell reiterated that there was no urgency to cut rates given the resilience of the economy. The Fed has remained clear that rate cuts will not materialise until inflation moves sustainably toward its 2% target. Market reaction was mixed—the dollar index initially spiked to 108.5 following the data but quickly pared its gains, falling below 108.2 at the time of writing. The inability of such a bullish inflation print to push the dollar higher suggests that 108.5 may act as a near-term resistance level, especially with no major upcoming data likely to shift sentiment further. Meanwhile, the 10-year US Treasury yield climbed to 4.65%, its highest level since mid-January, as bond markets adjusted to the stronger inflation outlook.

The base metals market opened on the back foot this morning, continuing the slight risk-off sentiment carried over from the previous day. However, momentum shifted during the second half of the day, driven largely by a boost in COMEX copper, which helped push LME prices back above the $9,400/t level. In particular, the COMEX/LME arb continued to widen, exceeding the robust $1000/mt benchmark, as COMEX markets continued to price in tariff concerns. As a result, LME copper settled at $9,454.50/t. Elsewhere, softness persisted as aluminium edged closer to the $2,600/t support level. Lead rejected prices above $2,000/t, closing at $1,973/t.

Gold opened lower but rebounded as the dollar retreated, trading at $2,894/oz. Silver tracked copper higher, surpassing $32.1/oz, reflecting its strong correlation with base metals in recent weeks. Oil prices declined steadily, with WTI at $72.2/bbl and Brent crude at $75.9/bbl.

Lme Metals Price And Volume 12022025

All price data is from 12.02.2025 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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