Summary
- China data confirmed fading momentum and weak consumer demand.
- Base metals started Monday firmer, supported by a more accommodative US stance in trade talks.
- Gold up on safe-haven flows while silver lags behind.
Macro
US stocks opened higher on Monday, supported by positive corporate earnings momentum. Key companies begin reporting this week, raising hopes of upbeat earnings surprises even as the US government shutdown, now stretching into its third week, continues to cloud the data horizon. Firms such as Tesla, Netflix and Procter & Gamble are set to publish their Q3 figures. The dollar index hovered around 98.5, while the 10-year Treasury yield slipped just below 4.0%, reflecting a cautious bid for safety following softer Chinese growth figures and expectations that slower global momentum will keep pressure on long-term yields.
China’s Q3 data confirmed that the effects of past stimuli have yet to gain meaningful traction. GDP expanded by 4.8% YoY, down from 5.2% in Q2, while quarterly growth of 1.1% only marginally beat expectations. Industrial output rose 6.5% in September, but consumer spending remained subdued with retail sales up just 3.0%, and fixed-asset investment still contracting by 0.5%. The muted response to policy easing is not entirely surprising: after decades of rapid expansion, China’s economy has matured, making it increasingly difficult for growth to match past rates. Structural challenges, ranging from a prolonged property slump to weak household confidence and trade frictions continue to weigh on momentum. While Beijing is likely to introduce additional targeted support in the coming months, the broader message is clear: China is entering a slower, more mature phase of expansion. The old investment-driven model is losing momentum, yet the hoped-for transition to stronger consumer-led growth has not materialised, leaving the economy reliant on policy support and external demand to sustain activity.
Base Metals
Base metals opened on an optimistic note today, as last week’s spread tightness unwound, giving more room for macroeconomic sentiment to guide the appetite. In particular, President Trump softened his tone on China, listing his demand, suggesting a more accommodative stance between two nations. We believe that another truce extension or partial deals could be achieved in the coming days, easing some of the trade risks. However, it is important to be mindful of the ever-changing rhetoric, as markets continue to react sensitively to developments in trade negotiations.
In the meantime, copper defended the $10,600/t support level, gaining momentum to $10,700/t as aluminium remained elevated at $2,778/t. Zinc jumped back above the $2,950/t mark, indicating that the recently-formed support $2,910/t is holding firm, especially as the spreads remain backwardated. Lead jumped higher, erasing losses made by the end of last week and coming back to $1,988/t. Nickel held within recent ranges, trading at $15,225/t at the time of writing.
Precious Metals and Oil
Gold recovered from its recent retreat, climbing toward $4,320/oz, while silver edged up to around $52.2/oz after lagging its yellow-metal counterpart. The divergent paths highlight heightened structural demand for gold as a safe-haven, whereas silver appears more speculative and less anchored in industrial fundamentals. Meanwhile, oil prices sank to their lowest levels since May, with WTI touching approximately $56.5/bbl and Brent trading just below $60.6/bbl.
All price data is from 20.10.2025 as of 17:30