Summary
- Softer US inflation reinforced expectations of two 25bps cuts by year-end.
- Base metals mostly firm, with copper testing resistance close to $10,700/t.
- Precious metals direction hinges on the Fed’s tone next week.
Macro
US equity indices climbed to fresh record highs on Friday after softer-than-expected inflation data reinforced expectations of a 25bps rate cut at next week’s Federal Reserve meeting. Headline CPI for September printed at 3.0% YoY, a touch above August’s 2.9% but slightly below consensus, while core inflation eased to 3.0% from 3.1%. A rise in petrol prices was broadly offset by a moderation in housing-related components, while travel and discretionary services showed slower price growth. However, some imported consumer goods continued to register upward price pressure, reflecting tariff passthrough.
The release has strengthened the view that inflation is cooling steadily, though the pace of disinflation remains uneven. With several key economic releases at risk of delay due to the ongoing government shutdown, markets may have less data than usual to gauge underlying momentum ahead of the Fed. The 10-year Treasury yield held just below 4%, while the dollar index was broadly stable around 98.9. Next week’s FOMC communication will therefore carry greater weight, particularly in shaping expectations for policy into year-end.
Business activity data painted a mixed picture. In the US, private-sector growth improved modestly in October, though firms signalled caution around hiring and inventory management amid external demand softness. By contrast, survey readings in the Eurozone surprised to the upside, with new orders improving at the fastest pace in over two years. In the UK, both business sentiment and consumer spending showed tentative signs of recovery, suggesting the domestic economy may be stabilising into year-end.
Base Metals
LME base metals ended the week mostly firmer. Aluminium eased slightly to around $2,855/t after Thursday’s sharp move higher. Copper tested $10,970/t, while zinc spreads continued to normalise, with the spot-to-three-month backwardation narrowing to roughly $175 from Wednesday’s extreme tightness. Tin shifted into backwardation, with nearby tightness helping lift prices towards $36,000/t. Nickel traded near $15,370/t, still capped below resistance at $15,400/t, while lead was unable to break $2,020/t, trading near $2,018/t.
Precious Metals and Oil
Precious metals steadied as the complex attempted to form a near-term floor. Gold traded within a $4,040–$4,140/oz range, while silver held between $48–$49/oz. Direction next week is likely to hinge on the tone of the Fed meeting: a less-dovish message, or any signal that a December cut is not assured, could leave gold vulnerable to another test lower, whereas confirmation of easing bias would help reinforce support around current levels.
Oil prices continued their upward trend, with WTI around $62.3/bbl and Brent near $66.6/bbl, supported by ongoing supply concerns. The broader market will be watching for any escalation in trade-flow adjustments following recent sanctions, which could add further volatility to crude pricing into November.
All price data is from 24.10.2025 as of 17:30