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Daily Base Metals Report

Fed Holds Rates Steady, Signals Slower Growth Ahead

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Research Associate

Contact research Contact Industrial Commodities

Summary

  • The Fed maintained the interest rates, noting that the current economic conditions allow for only 50bps of cuts this year. 
  • The continued widening of the COMEX/LME arbitrage pushed copper prices closer to the critical $10,000/t threshold.
  • Gold remains elevated as investors digested the Fed decision. 

Macro

US stocks climbed as markets braced for the crucial Fed meeting last night, where the Fed officials decided to hold rates steady, in line with expectations. Additionally, policymakers acknowledged a slower pace of economic growth alongside rising inflation levels, indicating that the bank plans to lower rates by only 50bps this year. It has also been announced that the Fed will slow the pace of reducing its balance sheet with a lower monthly cap on Treasury maturities. The dollar weakened immediately after the decision, reversing the majority of the gains made earlier in the day, coming back to the 103.50 level. The 10-year Treasury yield weakened to 4.25% as the 2-year yield sold off below the 4.0% mark. 

From the macroeconomic perspective, US factory output increased by 0.9%, marking the largest rise in a year, due in part to a boost in motor vehicle production, helping to ease some of the manufacturing concerns. However, we believe it is still too early to assess the impact of tariffs on domestic performance, as these effects usually take months to filter through to producers and even longer to reach consumers. This adds volatility to the near-term inflation trajectory. With little clarity on the fundamental burden of tariffs, upcoming economic data will play a crucial role in shaping market sentiment. As a result, we anticipate heightened market sensitivity and increased volatility in response to forthcoming economic indicators. In the meantime, 

Metals and Oil

In the base metals space, a widening COMEX/LME arb has once again led to a strengthening of copper prices, bringing them close to a psychologically robust resistance of $10,000/t. The next robust resistance level stands at $10,120/t – a September 2024 high. However, we believe that breaking above this level would require a fundamental catalyst, such as improving demand conditions, rather than relying solely on tariff-driven supply disruptions. Aluminium bounced back, rejecting prices below the $2,650/t mark. The $2,650–2,700/t range has held steady in recent weeks, struggling to break beyond these levels. Lead rejected prices above $2,100/t, as zinc weakened to $2,924.50/t. Nickel remained elevated at $16,399/t. 

Oil futures remained mostly flat as gold jumped higher to $3,047/oz. Silver, on the other hand, weakened back to $33.50/oz.

Lme Metals Price And Volume 19032025

All price data is from 19.03.2025 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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