Summary
US risk sentiment stabilised, but higher yields, China’s uneven recovery and French fiscal concerns kept the backdrop cautious.
Copper, aluminium and zinc defended key support levels, though dispersed geopolitical and valuation risks leave the complex vulnerable.
Gold and silver remained constrained by elevated US yields, while oil stayed high on Middle East supply and shipping risks, reinforcing inflation concerns.
Macro
US equities reversed earlier global risk-off move in early trading, following weakness across parts of Asia and a broader decline in Europe, with the S&P 500 strengthening during the day. Still, technology and AI-related shares remained under pressure after last week’s sharp semiconductor sell-off, while renewed French fiscal and political concerns weighed on European equities and sovereign debt. DXY tested 102.00 and settled closer to that level, while the US 10-year yield edged above 5.10%, preserving restrictive financial conditions despite the softer dollar.
China’s Q3 GDP grew by 4.5% YoY, above the forecast and up from 4.3% in Q2, with quarterly growth reaching 1.2%. September industrial production rose 5.5% YoY, while retail sales increased 1.1%, ahead of the 0.6% forecast but still well below industrial growth. Fixed-asset investment contracted 7.2% over January–September and property investment fell 20.6%, confirming that exports and manufacturing continue to carry the recovery while household demand and property remain weak. The data keep China’s 4.5–5.0% annual growth target within reach, reducing the immediate pressure for broad stimulus ahead of Tuesday’s PBoC decision.
France added to the cautious tone after weekend protests intensified concerns over the government’s ability to restore fiscal credibility. The 10-year French yield approached 4.9%, while the OAT–Bund spread widened to around 145bp as investors demanded greater compensation for holding French debt. With the deficit expected at 5.4% of GDP this year and debt projected at 119%, political fragmentation and the absence of a clear parliamentary majority are making the required fiscal adjustment harder to deliver.
Base Metals
Copper remained rangebound, although stronger volumes on the upside were consistent with more active buying interest around the $14,300/t support level. Aluminium showed a similar pattern, with price fluctuations increasingly suggesting that a floor is forming around $3,000/t. Zinc also defended support around $3,680/t before strengthening into the close, while the rest of the complex edged higher alongside a more comfortable risk-on tone.
Overall, base metals appear to be searching for new support levels heading into the week ahead. Macro risks, however, remain unusually dispersed across asset classes: French political unrest, the potential for renewed escalation in the Middle East and concerns around stretched AI valuations all represent separate event risks that could collectively amplify volatility if sentiment deteriorates. With few scheduled macro catalysts before Friday’s PMIs, these risks are also difficult to time in advance. This leaves the complex relatively well supported for now, but vulnerable to abrupt sentiment-driven moves should one of these external risks begin to dominate broader markets.
Precious Metals
Gold slipped below $4,160/oz as the US 10-year yield held above 5.1%, offsetting support from a softer dollar. Silver also struggled to hold $57.50/oz and traded near $57.30/oz, with weaker equity and industrial sentiment limiting its recovery.
Oil remained elevated amid persistent Middle East supply and shipping risks, although prices eased from Friday’s highs. Brent traded around $108/bbl and WTI just below $100/bbl. Continued strength in crude should keep inflation expectations elevated, limiting the upside for precious metals by reinforcing the case for restrictive monetary policy despite gold’s safe-haven appeal.
All price data is from 19.10.2026 as of 17:30