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Daily Base Metals Report

Cautious Set-Up into Labour Data

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Authors
Daria Efanova

Daria Efanova Head of Research

Viktoria Kuszak

Viktoria Kuszak Senior Research Analyst

Contact research Contact Industrial Commodities

Summary

  • Labour data remains asymmetric for markets, with softer prints carrying far more repricing risk than stronger ones.
  • Base metals weakened as markets continued to unwind positions today; we expect further mean-reversion into the weekend, before prices stabilise.
  • Despite the reset, the structural bid behind gold and silver remains intact; the near-term question is positioning, not conviction.

Macro

US equities opened mixed on Thursday as investors weighed a much smaller-than-expected US trade deficit against caution ahead tomorrow’s payrolls. October’s trade gap narrowed to $29.4 billion, the smallest since 2009, driven by a sharp fall in imports and a rise in exports, a combination that could add meaningfully to Q4 growth. The dollar index edged above 98.8 and the 10-year Treasury yield held just below 4.18 per cent, consistent with a market that is mildly dollar-supportive but reluctant to take strong directional views before the labour data.

Tomorrow’s Nonfarm Payrolls are expected to show an improvement relative to November, with consensus looking for positive job creation after consecutive softer releases across alternative labour indicators. Given that markets are currently pricing only one 25bps cut in the first half of 2026, labour data remain asymmetric for market reaction. A weaker-than-expected print risks prompting a repricing in rates and FX.

Base Metals

Base metals extended their pullback from recent highs, as markets took profit and unwound from stretched positioning. Copper opened lower to test the $12,500/t support level, before quickly bouncing back up to $12,700/t. Likewise, aluminium attempted to breach the $3,050/t mark before returning to hover just below $3,100/t. In line with yesterday’s comment, lead and nickel played catch-up with the rest of the complex, erasing gains made earlier this week, trading at $2,030/t and $17,200/t by the end of the day, respectively.
Realised volatility remains elevated, reflecting de-risking amid thinner liquidity. We expect some further mean-reversion into the weekend, before prices stabilise and attempt to establish new support.

Looking ahead, we see scope for risk sentiment toward another upside, but likely only once the market has absorbed the recent move and liquidity conditions normalise. In copper, the underlying support remains constructive: tariff-related fears continue to encourage incremental COMEX inventory build, while the broader balance is tightening as AI-driven demand expectations underpin the narrative. We believe that copper, and, in turn, the rest of the base metals complex, remains sensitive to upside signals, even if near-term price action stays choppy.

Precious Metals 

Gold struggled to recover Wednesday’s losses, trading below $4,460/oz, while silver extended its pullback, slipping below $76/oz. The cooling in both metals reflects a combination of profit-taking and short-term positioning adjustments rather than a deterioration in the underlying precious narrative. Into tomorrow, we expect trading to remain two-way and particularly sensitive to labour data, with silver still more vulnerable given its higher volatility and momentum-driven interest.

Oil prices recovered modestly, with WTI near $57.0/bbl and Brent at $61.1/bbl, though the broader trend remains range-bound as markets weigh geopolitical headlines against ongoing supply flexibility.

All price data is from 08.01.2026 as of 17:30

Disclaimer

This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

This report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Accordingly, the information may have been acted upon by us for our own purposes and has not been procured for the exclusive benefit of customers. Sucden Financial believes that the information contained within this report is already in the public domain. Private customers should not invest in these products unless they are satisfied that the products are suitable for them and they have sought professional advice. Please read our full risk warnings and disclaimers.

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