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Daily Base Metals Report

Base Metals Rise on Speculative Demand

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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

  • Weaker US sentiment data fuelled expectations for 70bps of Fed rate cuts by year-end.
  • Base metals gained, with speculative buying in copper and aluminium spilling over into the broader complex.
  • Gold stayed elevated, while silver broke through the key $42/oz resistance level.

Macro

US stocks closed the week at record highs, ending Friday on a quieter note as the markets absorbed a range of labour and inflation data this week. The Fed is expected to cut interest rates by 25bps next week, with at least one more cut anticipated by the end of the year, as labour figures weaken. This dovish sentiment was reinforced by the US consumer sentiment figure, which dropped to 55.2 - the lowest level since May- due to concerns about the labour market, while inflation remains elevated. Consumers expect prices to rise by 4.8% YoY over the next 12 months, with anticipated growth of 3.5% over the next 5-10 years. The dollar remained subdued but was supported by the 97.50 level, while the yield on the 10-year US Treasury bounced back to 4.07%.

Elsewhere, UK economic growth stagnated in July as consumer-facing services countered a significant decline in construction, attributed to previous tax increases. Potential further tax hikes in the upcoming budget may worsen these figures as the year comes to a close. Despite this, GBP/USD remained steady at 1.3566, indicating that the markets were not deterred from the Bank of England's expectation of no interest rate cut next week.

Base Metals 

Base metals continued to gain momentum following yesterday's rally in copper and aluminium, with the rest of the complex catching up. In particular, copper continued to post new highs, targeting the resistance of $10,100/t but quickly rejecting prices above this level to return to $10,067.50/t. With the March high at $10,164/t, we believe that the metal still has more room on the upside in the near term. Likewise, aluminium continued to gain momentum after yesterday's jump, nearing a key $2,700/t resistance, and hovering just below it at $2,689.50/t. Lead and zinc made decisive breakthroughs today, driven by increasing speculative interest across the complex. Lead reached $2,017.50/t, while zinc hit $2,957.50/t, a March high, following copper's upward trend. Nickel jumped to $15,380/t. 

Precious Metals and Oil

Oil futures strengthened in the second half of the day on the back of intensifying geopolitical risks between Russia and Ukraine, and subsequent call from the US for G7 nations to introduce tougher oil sanctions. As a result, WTI and Brent are trading at $63/bbl and $67/bbl, respectively. Precious metals remained elevated, with gold holding on to its recent highs at $3,650/oz, as silver breached a psychological resistance of $42.00/oz towards $42.25/oz.

All price data is from 12.09.2025 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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