Summary
- Softer UK inflation data tomorrow should reinforce the divergence between the Fed and BoE policy paths into year-end.
- Broad risk-off sentiment across equities aided the continuation of base metals’ softness.
- Precious metals remain highly data-sensitive this week, with both gold and silver tracking shifts in rate expectations rather than independent fundamentals.
Macro
US equities opened lower as investors positioned cautiously ahead of Wednesday’s highly anticipated Nvidia Q3 results. With its substantial index influence, the outcome is widely seen as a potential volatility catalyst for the broader market. Investors are not simply looking for another strong quarter but instead for convincing evidence that the AI-driven earnings cycle can sustain momentum well into 2026. We expect it will become increasingly difficult for Nvidia to maintain the rapid pace of recent growth, and even a slight softening in guidance could weigh on the broader tech sector in the near term. That said, we also expect any initial weakness to be met with renewed buying interest, as the structural AI theme remains a dominant driver of medium-term equity market performance.
The US 10-year Treasury yield drifted lower towards 4.1%, while the dollar index held around 99.5 after strengthening late last week as markets partially reversed expectations of a December Fed cut. Those rate-cut bets are now starting to rebuild, and a stronger-than-expected Nonfarm Payrolls print on Thursday could briefly revive speculation of a late-year move. However, we expect the Fed to remain on hold through December, maintaining a more hawkish posture until clearer evidence of genuine labour-market cooling emerges, particularly as this week’s payrolls data cover September and offer only limited insight into the most recent economic dynamics.
Across the Atlantic, we expect the Bank of England to move first. Our base-case is a 25bps reduction to 3.75% at the December meeting. UK inflation data, due tomorrow, is expected to soften further, and keeping a BoE cut firmly in play.
Base Metals
Sentiment from equity markets appears to have filtered into the base metals complex, contributing to today’s softness, though the move has been more orderly. The recent equity volatility highlights the degree of speculative length underpinning broader risk assets; however, with key technical levels in major indices still holding, this looks more like a short-term position clean-up rather than the start of a deeper risk-off trend.
For metals, volatility has barely moved, reinforcing the view that downside pressure is likely to remain balanced, and that any further weakness may attract potential dip buyers. Until speculative length is meaningfully unwound, price action is likely to stay choppy but rangebound.
In particular, copper faces support in the form of previous lows at $10,577/t. This suggests a continuation of rangebound moves, with copper’s longer-term narrative still underpinned by refined market tightness into year-end. Elsewhere, nickel continued to weaken strongly, testing the April lows of $14,550/t before bouncing back to $15,638/t. Zinc spreads collapsed, with the cash-to-3-month spread dropping to $104/t, aiding the unwinding of metal tightness and prompting the forward price to drop to $2,989/t.
Precious Metals and Oil
Gold briefly tested support near $4,000/oz before rebounding above $4,050/oz, reflecting a market still sensitive to shifts in rate expectations. Silver hovered around $50/oz, lacking a decisive directional catalyst ahead of this week’s data.
Oil prices eased slightly, with WTI slipping below 60.0/bbl and Brent steady around 64.0/bbl as traders reassessed demand indicators and awaited clarity from upcoming macro releases.
All price data is from 18.11.2025 as of 17:30