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Daily Base Metals Report

Soft Services, Softer Yields: Markets Watch Fed Cues

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Senior Research Analyst

Contact research Contact Industrial Commodities

Summary

•    US ISM Services Index slipped to 50.1, fuelling concerns about economic softness after last week’s weak jobs data.
•    Dollar and Treasury yields fell, lifting gold near $3,400/oz; silver climbed above $37.80/oz.
•    Base metals traded mixed in quiet conditions, with copper and aluminium inching higher, nickel slipping.

 

Macro:
US equity markets opened softer on Tuesday after the latest ISM Services Index disappointed. The index fell to 50.1 in July from 50.8 in June, pointing to stagnation in the services sector. The report showed little change in new orders and a further deterioration in employment, while input prices surged at their fastest pace in nearly three years, underscoring the impact of policy uncertainty and sustained cost pressures. Coming on the heels of last week’s soft labour market data, the miss added to investor concerns about slowing momentum in the US economy. The dollar index slipped to 97.8, reversing early gains, while the 10-year US Treasury yield also retreated below 4.2%. The resignation of Fed Governor Kruger further fuelled speculation that the Trump administration may soon nominate a dovish replacement. However, expectations for a September rate cut moderated slightly, with market-implied odds dipping below 90% from 97% on Monday.

Base Metals:
LME base metals were mixed and showed little conviction. Copper firmed modestly to $9,633/t but struggled for upside amid lacklustre macro signals. Aluminium edged up to $2,561/t, continuing to consolidate near recent lows. Lead and zinc posted slight gains to $1,961/t and $2,757/t respectively, though both remain stuck in sideways trends. Tin ticked up to $33,250/t, while nickel reversed part of Monday’s advance, falling back to $15,010/t. Overall, activity remained thin, with the summer lull capping volumes and direction.

Precious Metals and Oil:
Gold extended its rally, rising toward the $3,400/oz mark and last trading near $3,390/oz, supported by falling yields and a weaker dollar. While risk sentiment remains fragile, gold continues to respect its recent range, and a breakout will likely require a more decisive dovish signal from the Fed. Silver also strengthened, climbing above $37.80/oz. Oil prices declined, with WTI last seen at $65.30/bbl and Brent at $67.80/bbl.

All price data is from 05.08.2025 as of 17:30

Disclaimer

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