Summary
US yields eased below 5.30%, supporting equities and weakening the dollar ahead of Wednesday’s Fed minutes and Treasury auction.
Base metals lacked direction in thin trading, with copper near $14,415/t as markets awaited China’s return.
Gold recovered to $4,165/oz, while silver reached $61.30/oz, but elevated real yields kept gains in check.
Macro
US equities rebounded at Tuesday’s open as Treasury yields and oil prices eased, with technology stocks leading the advance. The 10-year yield hovered below 5.30%, while the DXY softened towards 101.8 after the US trade deficit widened to $105.6bn. However, persistent services inflation and elevated yields leave the dollar’s broader support intact.
In Europe, lower French yields helped the euro recover towards $1.125, although concerns over France’s fiscal outlook remain unresolved. We see this as only a temporary stabilisation, with the OAT–Bund spread still the key measure of contagion risk.
Attention now turns to Wednesday’s Fed minutes and the $39bn 10-year Treasury auction. We expect firm demand to keep yields below 5.30%, extending support for equities while placing further pressure on the dollar.
Base Metals
Base metals traded without a clear direction on Tuesday as China’s Golden Week continued to restrict liquidity. Aluminium advanced to an intraday high near $3,155/t before easing towards $3,130/t, while zinc recovered from below $3,740/t to $3,760/t. Lead held around $1,875/t, whereas copper consolidated at $14,415/t.
The subdued session followed last week’s broad decline, when high bond yields, a stronger dollar and uncertainty over energy costs weighed on the complex. Physical indicators remain mixed, with nearby copper and zinc spreads still in backwardation but less tight than previously.
We expect the complex to remain largely rangebound until Chinese participants return on Thursday. Copper needs a stronger post-holiday demand response to confirm support above $14,400/t, while today’s failure to extend gains despite the softer dollar points to limited conviction. China’s reopening and Wednesday’s Fed minutes should provide a clearer direction, with subdued physical buying likely to leave prices exposed to elevated US yields.
Precious Metals
Precious metals strengthened as Treasury yields eased from Monday’s highs and expectations of another immediate Fed increase continued to recede. Gold recovered from an early low near $4,115/oz and tested $4,180/oz before dropping to around $4,165/oz. Silver followed the move, climbing above $61.60/oz before pulling back and recovering to approximately $61.3/oz. The intraday reversals show that buyers are active around recent lows, although neither metal sustained the full move as US yields remained historically elevated.
Markets now assign only a 21% probability to an October Fed increase following weak payroll growth and downward revisions to earlier employment figures. However, an increase in December remains largely priced in, leaving gold caught between softer near-term policy expectations and the continued opportunity cost presented by high real yields. Political and fiscal uncertainty in France provides some defensive support, while lower oil prices are easing immediate inflation concerns and limiting the urgency for further tightening.
We expect gold to remain sensitive to the US rates market ahead of Wednesday’s Fed minutes and 10-year Treasury auction. A continued easing in yields could allow another test of $4,180/oz, but a more convincing recovery would require the metal to hold above that level. Silver remains closely linked to industrial sentiment and could continue to outperform if China’s return supports the base-metals complex, although its retreat from the session high keeps the near-term outlook cautious.
All price data is from 06.10.2026 as of 17:30