Summary
- US data vacuum after the shutdown sets the stage for tighter, more volatile trading conditions.
- Looking ahead, we anticipate the dollar to regain some of its conviction, capping upside appetite for the base metals complex, with prices likely to weaken in the near term..
- Silver’s speculative excess shows signs of unwinding.
Macro
US equities opened lower on Thursday as another bout of concern over stretched AI valuations weighed on the technology sector. The end of the 40-day US government shutdown offered only a fleeting lift to sentiment. Although Congress has restored funding until the end of January, the episode has left a lingering gap in economic visibility. Several key releases, most notably the October CPI and employment reports, may never be published if agencies cannot finalise them in time, leaving markets to navigate Q4 with fewer data anchors than usual.
We see this uncertainty feeding directly into rate expectations. The probability of a January Fed cut has fallen sharply this month, with swaps now pricing fewer than 40% odds of a 25bps reduction. December easing is all but priced out. This repricing has softened the dollar, pushing the DXY down to 99.0, even as the 10-year Treasury yield edged slightly higher to around 4.1%. The next catalyst is likely to come from high-frequency private-sector indicators and Fed communications, which we expect to take on greater importance in the data vacuum.
In the UK, GDP data confirmed that the economy effectively stalled in Q3, expanding by only 0.1% after 0.3% in Q2. The slowdown was exacerbated by the cyberattack that paralysed production at Jaguar Land Rover in September, triggering the sharpest monthly drop in car manufacturing since early 2020. We expect the weakness to intensify political pressure ahead of Chancellor Rachel Reeves’s 26 November Budget, particularly as lower trend productivity growth limits fiscal room. A subdued GDP backdrop is likely to weigh on sterling and support expectations of a Bank of England rate cut in December, with markets already leaning in that direction.
Base Metals
Markets steadied today, as another wave of speculative appetite stalled near key psychological resistance levels. As mentioned in our yesterday’s comment, this pattern mirrors moves seen in silver, where speculative positioning appears to be driving cross-commodity sentiment – a convergent theme across both precious and base metals.
We expect that previous highs will now act as robust resistances, as markets struggle to find new fundamental catalysts strong enough to sustain a lasting breakout. We expect a short-term correction period, particularly if fundamental conditions remain unchanged. Indeed, apart from tin and zinc, nearby spreads remain in contango, suggesting availability of deliverable material and limited tightness in the front-end of the curve. This underscores the view that the recent upside seems more momentum-driven. Looking ahead, we anticipate the dollar to regain some of its conviction, capping upside appetite for the complex, with prices likely to weaken in the near term.
Copper stalled above $11,000/t, closing at $10,956/t by the end of the day. Aluminium held below $2,900/t at $2,896.50/t, as zinc held its nerve at $3,055/t. Lead and tin, which both rallied higher in recent days, are also showing signs of consolidation, holding near highs, at $2,078/t and $37,232/t, respectively.
Precious Metals and Oil
Gold’s rally paused on Thursday, with prices consolidating around $4,210/oz as the resolution of the US government shutdown briefly reduced safe-haven demand, offsetting support from a softer dollar. We expect gold to retain underlying support as long as yields remain capped and political uncertainty persists, but the near-term upside looks more measured after this week’s sharp gains.
Silver, by contrast, displayed clear signs of momentum fatigue. Prices spiked towards $54/oz before retreating below $53/oz, with the failure to hold the highs and emerging bearish divergence on momentum indicators, particularly the RSI, suggesting that the market may be nearing a short-term inflection point. We see a growing risk of consolidation if speculative flows ease.
Oil prices were broadly unchanged, with WTI steady near $58.8/bbl and Brent around $63/bbl. The market continues to digest OPEC’s latest outlook, which now sees global supply and demand roughly balanced by 2026. We expect this shift, combined with persistent strength in non-OPEC production, to keep crude range-bound in the near term, with price direction increasingly tied to macro sentiment rather than supply shocks.
All price data is from 13.11.2025 as of 17:30