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Daily Base Metals Report

Moody’s Downgrade Casts Shadow on US Outlook

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Research Associate

Contact research Contact Industrial Commodities

Summary

  • US yields rise following Moody’s downgrade of sovereign credit rating
  • Lower volumes, OI, and volatility, combined with the absence of strong fundamental or macroeconomic catalysts, are causing base metals to drift.
  • Gold rebounds after Friday losses

Macro

US equities opened lower as investors weighed softer Chinese data and rising US yields. The increase in yields followed Moody’s downgrade of the US sovereign credit rating from Aaa to Aa1, citing concerns over rising federal debt and persistent fiscal deficits. This downgrade contributed to a sell-off in US government bonds, pushing yields higher as investors demanded greater compensation for perceived risks. 

China’s April retail sales rose 5.1% YoY, down from 5.9% in March and below expectations, reflecting continued fragility in domestic consumption. Industrial output also missed, growing 6.1% from 7.7% the previous month, as broader economic momentum showed signs of cooling. In the eurozone, final April inflation figures confirmed headline CPI at 2.2% and core CPI at 2.7%, both in line with estimates. Services inflation remained elevated, while energy prices continued to weigh on the headline figure. 

Separately, the UK and EU unveiled a formal framework to reset their post-Brexit relationship. The new platform includes regular dialogue on regulation, defence, and energy, aiming to rebuild strategic cooperation after years of disruption. While largely symbolic for now, it signals a shift toward more stable institutional engagement.

Base Metals

Base metals started the week on a quiet note. Volumes, OI, and volatility are all lower, and with a lack of a strong fundamental or macroeconomic catalyst, prices continue to drift. At the same time, the spreads are tightening, with larger long positions further out on the curve, suggesting that markets remain constructive in the longer term. However, in the short term, there is little incentive to break out of the current ranges, and the complex is more likely to track the dollar for now. 

In the meantime, copper continued to hover around the $9,500/t level, closing the day slightly above this level around $9,520/t. Meanwhile, aluminium continued to weaken, erasing previous gains, and falling to $2,447/t. Lead and zinc also weakened to $1,972/t and $2,677/t, respectively.

Precious Metals and Oil

Gold rebounded from Friday’s sharp drop, rising to 3,235/oz, while silver held steady near 32.4/oz. Oil traded sideways, with WTI and Brent at 62.6 and 65.4/bbl respectively at the time of writing.

Lme Metals Price And Volume 19052025

All price data is from 19.05.2025 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.

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