1. Metals Outlook
  2. Daily Base Metals Report
Daily Base Metals Report

Risk Appetite Rises on US-China Trade Optimism

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Summary

  • Markets rallied as US–China tariff cuts lifted risk appetite and drove the dollar sharply higher.
  • Base metals strengthened on the back of the US-China trade development, but the upside was capped by a combination of a stronger dollar and psychological resistance levels. 
  • Gold fell below $3,240/oz while oil extended gains on improving sentiment.

Macro

US equities surged on Monday following a breakthrough in trade negotiations between the US and China. The agreement entails a temporary 90-day reduction in reciprocal tariffs, with the US lowering duties on Chinese imports from 145% to 30%, and China reducing tariffs on US goods from 125% to 10%. The dollar index (DXY) climbed sharply, approaching 102.0, marking its strongest daily performance in over a month. This movement was driven by big losses in the euro (EURUSD down to 1.113) and the pound (GBPUSD softened to 1.2321), which together account for nearly 70% of the index's weight. Investor optimism led to a shift away from safe-haven assets, pushing the 10-year US Treasury yield above 4.43%.

Base Metals 

Base metals responded positively to the recent trade developments between the US and China; however, a stronger dollar limited the gains on the LME. Copper is holding just above the $9,500/t mark but has struggled to break through the $9,582/t resistance level, which has constrained price increases in recent days. On the other hand, aluminium jumped higher, testing the $2,500/t resistance level before settling the day around the $2,480/t level. We believe that this resistance level is crucial for aluminium from a technical perspective; breaching it could spur a stronger risk-on appetite, particularly since aluminium has lagged behind copper and other base metals in recent months. Lead and zinc also opened higher, but technical resistance levels of $2,000/t and $2,700/t have halted the upward momentum. Meanwhile, tin successfully broke through the $32,000/t resistance to close at $32,574/t.  

Precious Metals and Oil

Gold prices declined sharply, with the spot price falling to $3,235/oz, as demand for safe-haven assets waned. Silver experienced volatility but ultimately traded steady at $32.6/oz, aligning with its 50-day moving average. Oil prices continued their upward trajectory, with WTI and Brent crude rising to $62.5/bbl and $65.3/bbl respectively, as market sentiment improved.

Lme Metals Price And Volume 12052025

All price data is from 12.05.2025 as of 17:30

Disclaimer

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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.

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