Summary
- Softer PCE lifted equities, but resilient US activity and oil above $90/bbl pushed the 10-year yield back towards 5.30%.
- Base metals weakened into the close, with aluminium, lead and zinc ending near session lows as macro pressure outweighed supply concerns.
- Gold and silver reversed earlier gains as yields rebounded, leaving $4,200/oz and $60/oz as the key respective levels.
Macro
US equities opened higher after softer-than-expected inflation data offered some relief from concerns over further near-term monetary tightening. August headline PCE rose 0.3% MoM and 3.4% YoY, while core PCE increased 0.2% and 3.0%, both below expectations. The dollar weakened but remained above 101.2, as stronger activity data complicated the inflation signal: consumer spending rose 0.9%, ADP employment increased by 90,000 and second-quarter GDP was revised sharply higher to 2.2%.
The initial decline in Treasury yields proved short-lived, with the US 10-year subsequently returning towards 5.30%. We see this as evidence that markets remain focused on the resilience of US demand and the wider inflation outlook, rather than treating one softer PCE release as confirmation of sustained disinflation. The annual PCE figures were also lowered partly by methodological revisions, while inflation remains above the Federal Reserve’s 2% target.
Energy prices remain an additional constraint, with Brent holding above $103/bbl and WTI above $91/bbl. Elevated crude prices risk feeding back into headline inflation and transport costs, limiting the extent to which softer underlying inflation can pull yields lower. We therefore expect the dollar to remain relatively supported and equity gains to stay vulnerable while the 10-year yield tests the 5.30% area.
Base Metals
Base metals came under renewed pressure into the close as rising Treasury yields and a still-firm dollar outweighed the improved tone in equities. Aluminium fell sharply to $3,163/t, while lead and zinc declined to $1,871/t and $3,814.50/t respectively, with all three finishing near their session lows. Copper slipped to $14,404.50/t after failing to sustain an intraday recovery, while nickel held around $15,970/t and tin eased to $54,055/t.
The late-session weakness leaves near-term momentum tilted lower, particularly in aluminium, lead and zinc. We expect elevated yields to remain a constraint tomorrow, while the ISM manufacturing survey will provide the next indication of US industrial demand. Copper’s underlying supply picture remains tight, but broader macro conditions could continue to dominate short-term price action.
Precious Metals
Gold briefly advanced above $4,220/oz following the softer PCE release but reversed as the US 10-year yield returned towards 5.30%, leaving prices near $4,158/oz. Silver experienced a steeper retreat to $60.30/oz, with the earlier recovery losing momentum above $61.50/oz.
We expect elevated yields to keep both metals under pressure tomorrow despite the softer dollar. Gold must regain $4,200/oz to restore upward momentum, while silver remains vulnerable near the psychologically important $60.00/oz level. The next direction will depend on whether US jobless claims and ISM manufacturing reinforce the market’s expectation that interest rates will remain restrictive.
All price data is from 30.09.2026 as of 17:30