Summary
- US stocks declined after Trump threatened to increase tariffs on Chinese goods.
- The Japanese government has made efforts to stabilise the market, prompting yen to strengthen today.
- Base metals weakened sharply by the end of the day, indicating that yesterday’s gains might not be sustainable.
- While gold volatility subsided, silver remained a focal point, fluctuating around the critical $50/oz level.
Macro
US stocks declined sharply after President Trump threatened a potential "massive increase" in tariffs on Chinese goods, jeopardising the truce that has been in place between the two nations since May 2025. With the November 10th deadline for the tariff pause approaching, both countries seem to be engaging in a tit-for-tat strategy to establish leverage over one another. Today's announcement from Trump follows news from China regarding rare-earth export controls, which have intensified trade tensions between these key economies. This shift in sentiment has reduced risk appetite in the market, leading to weaker S&P 500 performance and sharply reversing dollar gains, bringing its value back to 99.00.
Elsewhere, Japan's Finance Minister Kato has indicated that the government will closely monitor any excessive fluctuations in the market amid the recent weakness of the yen. This highlights that policymakers are ready for any potential intervention to address further declines. As a result of these comments, the yen strengthened today, rising to 151 against the dollar.
Base Metals
On Friday, base metals' moves were largely confined within the ranges established yesterday. However, as the day progressed, selling pressures increased, leading to a reversal of the most recent gains. This shift indicates that the upward trend seen yesterday may have been unsustainable. Copper experienced a sharp correction after falling below the $10,700/t level, dropping to $10,518/t. Similarly, aluminium also declined, breaking through the support level of $2,750/t and closing at $2,748/t. Lead displayed volatile trading activity, fluctuating between highs of $2,040/t before dropping to $2,020.50/t. Tin sold off, plummeting to $35,370/t and effectively erasing the gains made in October. Zinc showed some hesitation, struggling to maintain a break below the $3,000/t mark, suggesting that market confidence remains that prices will stay elevated.
Precious Metals and Oil
Gold opened lower this morning as it cautiously tests the critical $4,000/oz level, with markets watching to see if there is enough market support around this threshold to drive prices higher. Although gold is showing signs of calming volatility, uncertainty surrounding silver has kept overall market volatility high, with silver fluctuating significantly around the crucial $50/oz mark. With the silver lease rate climbing past 35%, markets are paying record premiums to secure immediate access to metal, underscoring the scarcity of available bars in London vaults as speculative demand intensifies.
Oil futures continued to weaken, with WTI and Brent extending the slide to $59.30/bbl and $63.10/bbl, respectively, as the Gaza ceasefire remained in focus.
All price data is from 10.10.2025 as of 17:30