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Daily Base Metals Report

Conflict Premium Set to Fade as Talks Approach

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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

  • The latest inflation print shifted market attention away from geopolitics, putting downward pressure on the dollar.
  • Aluminium and copper outperformed, driven by a combination of systematic flows and a supportive macroeconomic backdrop.
  • Precious metals lagged base metals, with inflation data providing a moderate boost by the end of the day.

Macro

US equities were steadier, with the focus shifting from geopolitics to macro as the impact of the Middle East conflict begins to feed through into data. March CPI came in elevated but not as extreme as feared, with headline at 0.9% MoM and 3.3% YoY. The key driver was energy, with a sharp surge across components, including a record jump in gasoline and strong gains in fuel oil, reflecting the earlier disruption to flows through the Strait of Hormuz. With oil prices now stabilising, markets are starting to look past the initial shock and focus on how these price pressures translate into economic activity.

The reaction across macro assets suggests this shift is underway. The dollar eased towards 98.5, while the 10-year yield held around 4.3%. Markets are not pricing in hikes, with the narrative moving towards the growth impact of the shock rather than additional inflation tightening. Going forward, the focus is likely to move to whether higher energy costs begin to weigh on demand and labour data.

With negotiations between the US and Iran in focus this weekend, the successful ceasefire agreement is likely to further unwind war-related volatility premiums across macro asset classes, with oil weakness likely to be gradual as investors monitor the number of ships passing through the Strait of Hormuz.

Base Metals

Base metals were mostly higher, supported by the softer dollar. Aluminium outperformed, rising steadily towards $3,510/t, although the increase in on-warrant stocks in Malaysia, linked to previously cancelled warrants during the conflict, points to easing supply concerns. This suggests the recent strength may not be sustained, with downside risks emerging into next week if macro support fades.

Copper remained rangebound for most of the early session before breaking higher towards $12,900/t after the CPI release. The initial round of higher prices coincided with aluminium rising in the early afternoon, which we believe was led by the COMEX advance. The second move higher highlights the dollar's sensitivity, with the softer currency providing support. If the dollar continues to weaken, copper has room to extend gains.

Nickel traded sideways, capped at around $17,300/t, and continued to lack a clear catalyst.

Precious Metals

Precious metals were rangebound before moving higher after the inflation data. Gold rose above $4,780/oz and silver tested $76.5/oz, reacting to the combination of a softer dollar and stable yields. The price action proves that metals continue to trade off macro drivers, disregarding geopolitical risk. If growth concerns start to build and rate-cut expectations return, the environment could become more supportive of precious metals.

Oil prices were broadly flat, with WTI around $98/bbl and Brent near $96/bbl. With the immediate supply shock stabilised, oil is no longer driving markets in one direction, and the focus is shifting towards how the earlier spike feeds into inflation and growth.

All price data is from 10.04.2026 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.

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