Summary
Equities remained risk-on despite mounting AI valuation concerns, while the dollar weakened.
A softer dollar and supportive physical conditions underpinned the complex, although subdued fund positioning leaves rallies vulnerable to profit-taking.
WTI briefly tested $110/bbl before retreating, easing inflation concerns and supporting a recovery in gold and silver.
Macro
US equities opened on the front foot today despite growing concerns about AI-related valuations, after a Korean data-centre operator fell on its IPO debut. The company is part of the neocloud sector—firms specialising in dedicated facilities for AI computing—which is facing concerns over financing, construction delays and uncertain returns. Weakness in technology stocks was offset by gains in financials and healthcare, resulting in a risk-on tone. This suggests that concerns about a potential AI bubble, which have lingered for months, are gaining traction among market participants. The timing of any correction remains difficult to predict, but if one materialises, already elevated valuations could adjust sharply and quickly, leaving investors little time to react.
With little on the macroeconomic calendar, markets will continue to monitor the AI equity space. SpaceX and Meta are due to publish corporate results later today and tomorrow, providing a gauge of sentiment among larger players.
Meanwhile, the dollar weakened sharply, falling to 101.50, while the 10-year US Treasury yield fluctuated around 5.10%.
Base Metals
Base metals posted modest gains across most of the complex, helped in the late afternoon by a weaker dollar and lower oil prices. Copper continues to defend support around $14,270/t, with recent volume spikes concentrated on upside reversals. At the same time, nearby spreads remain tight and the positive COMEX–LME arbitrage continues to pull material towards the US, while LME stocks remain broadly steady. This keeps the physical backdrop supportive. As long as that structure remains intact, downside should remain relatively contained, in our view.
Aluminium continued to whipsaw around the $3,000/t level, with price action struggling to establish a clear direction. Despite recent moves in oil, aluminium has shown little sensitivity to energy prices, even though the earlier Iran-related conflict had highlighted the region’s importance to global smelting supply. Instead, the metal remains trapped in a relatively well-defined $2,950–3,050/t range, suggesting that the market has largely moved beyond the earlier geopolitical premium and is now waiting for a clearer fundamental or macro catalyst. This leaves aluminium more vulnerable to short-term technical and positioning flows than to energy-driven repricing.
The latest COT data reinforce the idea that positioning remains broadly supportive but not aggressively bullish. Net length is still present across the complex, yet recent flows point more towards profit-taking and de-risking than renewed conviction. The pause in COMEX copper Managed Money liquidation suggests that the initial unwind may be stabilising, but there is still little evidence of fresh long accumulation. LME copper and zinc have also seen sizeable reductions in fund length as prices weakened, leaving some residual near-term selling risk, while aluminium’s smaller decline looks more consistent with orderly profit-taking. Overall, this suggests that downside pressure should begin to ease if positioning stabilises, but any durable recovery will likely require a renewed build in long exposure; until then, rallies remain vulnerable to further profit-taking and episodic volatility.
Precious Metals
Oil prices rallied in early trading, with WTI testing the $110/bbl threshold—a level not seen since the end of April, at the height of the conflict in the Middle East. The move reflected persistent concerns about the impact of Middle Eastern tensions on energy supplies. However, the momentum quickly faded, prompting a retreat towards $104/bbl.
Following oil’s earlier ascent, gold declined as higher energy prices intensified inflation concerns and clouded the outlook for the Federal Reserve’s interest-rate path. The subsequent drop in oil prices supported a recovery in precious metals, with gold and silver ending the day around $4,150/oz and $58.50/oz, respectively.
All price data is from 20.10.2026 as of 17:30