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Daily Base Metals Report

Oil Revives the Inflation Risk

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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

  • A stronger dollar and renewed oil-price pressure kept markets cautious ahead of Wednesday’s US CPI.

  • Copper outperformed on physical tightness, while aluminium and zinc remained vulnerable below key levels.

  • Gold and silver weakened as elevated yields outweighed safe-haven demand, leaving $4,200/oz and $60.00/oz as key levels.

Macro

US equity markets remained open for Columbus Day, but the closure of the cash Treasury market and holidays in Japan reduced liquidity and left investors without a fresh signal from US yields. The dollar nevertheless extended its advance, with DXY trading around 102.44, as markets continued to position for a gradual Federal Reserve tightening cycle. Oil added to the cautious tone, with Brent approaching $107/bbl and WTI near $94/bbl amid renewed Middle East tensions.

The rise in crude has made this week’s US inflation data more consequential. Although the immediate effect will not be fully reflected in Wednesday’s CPI release, sustained energy strength risks feeding into fuel, transport and production costs over the coming months. This could slow the disinflation process and reinforce expectations that the Federal Reserve will need to keep rates restrictive for longer.

Wednesday’s CPI is therefore the first major test, followed by PPI and retail sales on Thursday. We expect inflation to remain sufficiently persistent to keep the dollar supported and limit the scope for a sustained recovery in risk assets. In Europe, French financing concerns and sovereign spreads remain an additional source of risk, while Thursday’s UK GDP figures will shape expectations for the domestic growth and rate outlook.

Base Metals

Base metals lacked a uniform direction. Copper held around $14,627/t after testing $14,700/t, while tin recovered towards $53,200/t. Elsewhere, aluminium remained below $3,100/t, zinc reversed its earlier recovery to $3,762/t, and lead and nickel ended the session on a softer footing.

Copper continues to benefit from physical-market tightness and declining exchange inventories, helping it withstand the firm dollar better than the wider complex. Attention now turns to Wednesday’s US CPI, with persistent inflation likely to lift yields and trigger some consolidation after copper’s recent advance while adding pressure to aluminium and zinc. A recovery above $3,800/t would improve zinc’s near-term outlook, whereas aluminium remains vulnerable while below $3,100/t.

Precious Metals 

Precious metals weakened as the firm dollar and restrictive US rate outlook outweighed renewed safe-haven demand. Gold’s advance above $4,210/oz faded steadily, pulling prices back to around $4,165/oz, while silver retreated more sharply towards $60.30/oz after failing to hold above $61.00/oz.

Wednesday’s US CPI will test whether geopolitical uncertainty can provide meaningful support while yields remain elevated. We expect persistent inflation to preserve the rate headwind and keep rallies limited, with gold’s failure to hold above $4,200/oz leaving momentum subdued. Silver’s greater sensitivity to both yields and industrial sentiment leaves $60.00/oz as the key near-term support level.

All price data is from 12.10.2026 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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