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Daily Base Metals Report

CPI Takes Centre Stage as Metals Diverge

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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

  • US equities surrendered early gains, while firm oil and a recovering dollar kept sentiment cautious ahead of CPI.

  • Copper held near record highs amid Escondida strike risk, contrasting with aluminium’s three-month lows and weaker zinc.

  • Gold reversed below $4,200/oz as higher oil reinforced inflation and rate concerns, while silver fell towards $59.00/oz.

Macro

US equities gave back an early advance as mixed bank earnings and renewed weakness across technology shares kept risk appetite subdued ahead of Wednesday’s CPI release. The dollar recovered most of Monday’s decline, while the US 10-year yield was comparatively muted, leaving equities under pressure without a decisive fresh signal from rates. Oil remained the more significant macro risk, with Brent holding above $106/bbl and WTI around $94.50/bbl as geopolitical and supply concerns sustained the energy premium.

Attention now turns to US CPI, with headline inflation expected to rise to 3.6% YoY. We expect persistent price pressures, reinforced by elevated oil prices, to keep the Fed cautious and policy restrictive, supporting the dollar and limiting upside across equities and metals.

Base Metals

Base metals traded without a uniform direction as subdued volumes and caution ahead of US CPI limited conviction. Aluminium remained close to its lowest levels in three months, while copper was broadly flat near recent record highs. The divergence continues to underline copper’s stronger fundamental support, while aluminium remains more exposed to the firm dollar and high energy costs.

Copper also remained sensitive to developments at BHP’s Escondida mine in Chile, where Tuesday marked the deadline for supervisors to accept an improved offer during mandatory mediation. The union had already authorised strike action after rejecting the previous proposal, and failure to reach an agreement would clear the way for industrial action from Wednesday. With Escondida the world’s largest copper mine, the possibility of disruption continues to provide support near record price levels.

Lead and tin were near mirror images during the afternoon. Lead rose above $1,900/t as volumes accelerated but struggled to hold the move into the close, suggesting that buying conviction weakened above the level. Tin came under pressure at around the same time, briefly falling towards $52,000/t before closing near $51,205/t. Zinc also weakened, retreating towards $3,725/t after failing to sustain its earlier recovery near $3,770/t.

Precious Metals 

Gold remained confined between $4,150/oz and $4,200/oz, reversing sharply after testing the upper end of the range. The inverse relationship with oil reasserted itself, as higher crude prices reinforced inflation and rate concerns, offsetting the support from elevated geopolitical risk.

Silver underperformed, falling towards $59.00/oz as its greater sensitivity to industrial sentiment amplified the move. Wednesday’s CPI will therefore be pivotal. A strong reading would leave $4,150/oz and $59.00/oz exposed to renewed pressure.

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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