Summary
- Trump–Xi talks eyed for tariff delay.
- Fed cut expected; tone key for risk sentiment.
- Gold slips below $4,000/oz.
Macro
Optimism emerged at the start of the week, driven by rising expectations that Thursday’s Trump–Xi meeting in South Korea could deliver at least a temporary trade truce. Markets are focused on whether the talks result in an extension of the current tariff reprieve, delaying the planned 100% US tariffs on Chinese imports due to take effect on 1 November. US officials have also suggested that China may delay plans to introduce rare earth export controls, which would help ease near-term concerns for supply chains and manufacturers.
US equities opened at new highs, mirroring the record-setting tone seen earlier across Asian and European indices. Even a symbolic easing of tensions on Thursday could reinforce the current risk-on tone and lend further support to global equities and credit.
This improvement in sentiment comes ahead of a pivotal week for central banks. The Fed is widely expected to cut rates by 25bps, though Chair Powell’s communication will be key for determining the durability of the rally. A less-dovish tone could prompt a hawkish repricing across rates markets and temper the recent strength in risk assets. Meanwhile, both the ECB and BoJ are expected to leave policy rates unchanged at 2.0% and 0.5% respectively, with investors attentive to any shift in language that may signal how policymakers could respond should global growth momentum soften.
Base Metals
LME base metals firmed on the improved sentiment surrounding a possible US–China trade agreement, though the moves were relatively modest. Copper briefly pushed above $11,000/t, trading around $11,030/t and edging closer to its all-time high of $11,104.5/t set in May 2024. Aluminium also gained, closing at trading above $2870/t, while lead traded above $2,020/t and tin touched $36,375/t before easing back towards $35,970/t. Zinc edged higher, though its tight nearby spreads remain notable, with cash to three-month backwardation still around $200. Nickel, meanwhile, surrendered part of last week’s advance, ending at $15,275/t.
Precious Metals and Oil
The broad risk-on tone weighed on precious metals, with the appeal of safe-haven positioning fading further. Gold slipped below $4,000/oz, briefly testing support near $3,970/oz. Near-term attention will fall on whether that level continues to hold, with any shift in Fed tone later this week likely to set the next directional cue. Silver followed a similar path, moving towards $46.0/oz before recovering modestly towards $46.7/oz.
Oil prices, meanwhile, have lost momentum after their recent advance following the announcement of US sanctions on Russian energy firms. While the restrictions clearly emphasise supply-risk themes, the market is treating them more as a structural concern than an immediate disruption: Russia continues to export via its “shadow fleet,” limiting the sanction impact. In this context, both WTI and Brent are hitting resistance near $62.0/bbl and $66.5/bbl respectively, levels that will prove key in determining whether oil breaks out higher or consolidates.
All price data is from 27.10.2025 as of 17:30