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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

Summary

  • Risk-on sentiment improved by the end of the week as China provided a softer tone regarding trade negotiations with the US
  • A weaker dollar and mean-reversion strategies resulted in moderate gains across the base metals complex 
  • Gold held steady, suggesting an underlying view of the metal’s resilience amidst the current trade and geopolitical landscape. 

Macro

US stocks strengthened today, extending this week’s gains due to a softer tone from China regarding trade negotiations with the US. While we do not anticipate that the relationship between the two countries will become accommodating in the near term, there are now signs that both parties are willing to ease some of the trading pressures to start negotiations for a beneficial deal for both countries. This development should support a modest risk-on environment in the near term; however, sentiment is likely to remain cautious due to ongoing uncertainty about potential headline risk from either government. From the macroeconomic perspective, the jobs report for the month of April showed a solid pace of growth, adding 177,000 jobs, with the unemployment rate remaining unchanged at 4.2%. The dollar index weakened as markets struggled to break the 100 level sustainably, prompting a modest correction to 99.70. The 10-year US Treasury yield held at 4.22%.

Base Metals

Base metals finished Friday on a softer note, affected by a combination of a weaker dollar and mean-reversion strategies ahead of the long weekend, indicating subdued volatility in the markets. Copper edged higher to the $9,365.50/t level, which we believe is a healthy base from which a new trend could emerge, given the presence of a fundamental trigger. Aluminium, on the other hand, remains oversold compared to copper, and we expect that gains in broader market sentiment could trigger a disproportionately greater response in aluminium. In the meantime, the support at $2,400/t remains intact as the metal closed at $2,431.50/t. Lead and zinc edged higher to $1,943.50/t and $2,607.50/t, respectively. 

Precious Metals and Oil

Oil finished the week on the back foot as markets digested continued uncertainty regarding the trade relationship between China and the US, along with the potential moves from OPEC+, prompting WTI and Brent to correct to $58/bbl and $61/bbl, respectively. Gold held its nerve as investors struggled to break the $3,200/oz support level, suggesting an underlying longer-term view of gold’s resilience amidst the global trade and geopolitical landscape.

All price data is from 02.05.2025 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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