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Daily Base Metals Report

Fiscal Worries Drag on US Sentiment

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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 equities drop as fiscal concerns resurface.
  • Despite periods of risk-on appetite, base metals remain capped by persistent upside resistance. 
  • Gold holds above $3,300/oz.

Macro

US stocks opened sharply lower on Tuesday, as renewed concerns around the trajectory of US fiscal policy weighed on sentiment. The latest tax reform proposal is projected to add over $3.3 trillion to the national debt over the next decade, prompting questions about the long-term sustainability of US public finances and the willingness of global markets to continue absorbing Treasury issuance. These concerns follow the recent downgrade of the US credit rating by Moody’s and have contributed to continued upward pressure on yields. The 10-year US Treasury yield rose further, trading above 4.52%, while the dollar index softened, slipping below 99.6. In the UK, April CPI came in hotter than expected at 3.5% YoY, with core inflation at 3.8%. The upside surprise was largely due to regulatory-driven increases in household costs, including energy bills, water charges, and vehicle taxes. The print has shifted market expectations, with traders now pricing in just one BoE rate cut over the next 12 months.

Base Metals

Base metals continued to face pressure, unable to break out of their current range. Specifically, early morning gains face strong resistance on the upside, causing the market to retreat by day's end. Copper once again encountered resistance at $9,600/t while maintaining support at $9,500/t, closing the day largely unchanged at $9,534/t. Aluminium also struggled above the $2,500/t, settling below at $2,474/t. Lead and zinc experienced moderate volatility during the day, edging lower to $1,965/t and $2,688/t, respectively, at the time of writing.

Precious Metals and Oil

A softer dollar provided some support to gold, but rising Treasury yields capped gains. The yellow metal hovered just above $3,300/oz, with price action reflecting a tug-of-war between safe-haven demand and rising real yields. Silver edged higher to $33.30/oz, testing the top of its three-week trading range. Oil prices rose on reports of a possible Israeli strike on Iranian targets, fuelling geopolitical risk premia. WTI and Brent traded at $62.0/bbl and $65.4/bbl respectively at the time of writing.

Lme Metals Price And Volume 21052025

All price data is from 21.05.2025 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.

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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