Summary
- Weak retail sales hit equities, but yields near 4.7% show markets are not fully buying a dovish Fed shift.
- Copper and zinc spreads remain tight, though outright base metals still need stronger macro support.
- Gold and silver recovered on dollar weakness, but further upside depends on a clearer fall in US yields.
Macro
US stocks opened lower as investors took profit after recent record highs and reassessed the growth outlook following weak US retail sales. July retail sales fell 0.6% MoM, the first decline in nine months, pointing to softer consumer momentum at the start of Q3. DXY slipped below 99.6 and found support around 99.5, but the move was not enough to trigger a sustained Treasury rally.
The US 10-year yield rebounded towards 4.7%, suggesting investors are still reluctant to fully price a dovish Fed shift despite weaker consumption and softer inflation data earlier in the week. Persistent inflation risks, fiscal concerns and uncertainty around energy prices continue to keep the rates market cautious.
US-Iran tensions remain unresolved, with the threat of an extended blockade and constrained Strait of Hormuz traffic keeping crude supported. This limits how far markets can price out energy-driven inflation risk. In Europe, the second reading confirmed Eurozone GDP rose 0.4% QoQ in Q2, showing some resilience, although the region remains exposed to any renewed energy shock. Overall, the tone is more cautious, with equities vulnerable after recent gains and yields still refusing to give a clean dovish signal.
Base Metals
Base metals were mixed, with copper unable to extend despite continued tightness in the nearby spread. Three-month copper was capped around $14,200/t and closed near $14,150/t, while the cash-to-3-month spread widened above $434 backwardation and the Aug-Sep spread approached $350, the widest one-month spread since 2021.
Falling inventories are supportive, but the strength of the Aug-Sep backwardation also points to prompt availability and positioning pressure. With remaining roll activity likely to be concentrated around the next prompt-date window, the spread could stay volatile in the near term but may ease quickly once immediate short-covering pressure has passed.
Zinc remains one of the firmer markets, with the cash-to-3-month spread also deeply backwardated around $110, keeping the short-term structure tight even as prices consolidate near recent highs.
Aluminium weakened towards $3,255/t and remains under pressure after the EGA guidance on returning production to pre-war levels in Q1 2027 reduced the case for chasing upside without fresh disruption risk.
Overall, spreads continue to point to tight nearby conditions in copper and zinc, but the outright complex still needs better macro follow-through to turn that tightness into a cleaner upside move.
Precious Metals and oil
Precious metals recovered after earlier profit-taking, with gold rising back towards $4,392/oz and silver around $65.1/oz. The broader tone remains constructive, supported by softer recent inflation data and a weaker dollar, but the move is still sensitive to US yields, especially with the 10-year moving back towards 4.7%. Gold has rebuilt support after testing the low $4,300/oz area, but it needs to hold above $4,380/oz to confirm renewed upside momentum.
Silver also rebounded from this morning’s lows but remains below the recent high near $66.5/oz. The recovery suggests buyers are still active on dips, although the market looks more vulnerable to positioning after the recent sharp rally. For now, we expect dips to remain supported while the dollar stays weak, but stronger gains will need a clearer fall in US yields.
All price data is from 14.08.2026 as of 17:30