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Daily Base Metals Report

UK CPI Surprises Investors

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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

  • Stronger than expected UK inflation surprises the markets.
  • Base metals continued to follow a cyclical pattern, recovering slightly today. 
  • Precious metals rebound.

Macro

US equities opened weaker on Wednesday, extending the slide triggered by Tuesday’s tech sell-off. Renewed concerns that AI valuations may be running ahead of fundamentals weighed on sentiment, although solid earnings across the sector suggest scope for recovery once positioning stabilises. The dollar index held just above 98.1, while the 10-year Treasury yield slipped below 4.29%.

In the UK, inflation surprised to the upside in July, with headline CPI climbing to 3.8% YoY from 3.6% previously and core rising to 3.8% YoY from 3.7%. The increase was driven by higher air fares and fuel, while services inflation accelerated to 5%, a measure closely monitored by the Bank of England. The data reinforced market scepticism about further easing this year, with the probability of a 25bp cut by year-end dropping to around 50%. We see growing divergence with the Eurozone, where inflation remains far more subdued at 2% headline and 2.3% core.

Base Metals

Base metals experienced a pause in downside pressures today as prices approached near-term support levels, leading some metals to recover slightly. This trend highlights that the markets are following a technical cyclical pattern, especially given the lack of significant external influences. Copper tested and rejected prices below the $9,700/t mark, recovering to $9,724/t. Similarly, aluminium remained just above the crucial $2,550/t support level, trading at $2,580/t at the time of writing. Lead and zinc also bounced back, reaching $1,981/t and $2,787/t, respectively. Nickel struggled to stay below $15,000/t, closing the day near this level at $15,040/t.

Precious Metals and Oil

Gold rebounded to $3,342/oz after a few days of losses, supported by lower Treasury yields. Silver also regained ground, trading above $37.76/oz. Oil prices held within recent ranges, with WTI at $63.2/bbl and Brent at $66.7/bbl.

All price data is from 20.08.2025 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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