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Daily Base Metals Report

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US stocks gained a foothold on the upside today alongside European shares as positive news around vaccine development and the speculations about Washington passing the stimulus bill this week. US jobs data painted a grim picture, as July payroll gains slowed down sharply to 167,000, down from 4.3m in June. Meanwhile, the US service industry expanded to 58.1 in July, the fastest pace since February 2019. The dollar softened into 92.627, and the 10yr yield on Treasuries picked up to 0.5445%. Eurozone’s composite PMI index climbed to the highest level in 2 years.

Metals prices were all stronger today, except for aluminium, which closed on the back foot at $1,767/t. Nickel was firmer today, testing the resistance at $14,600/t before closing at $14,419/t. Copper was also well bid, closing at $,6494.50/t; the cash to 3-month spread softened into $2.00/t backwardation. Lead and zinc strengthened today, closing above resistance levels of $1,930/t and $2,400/t at $1,933/t and $2,409/t respectively. Tin remained range-bound, closing at $17,885/t.

Oil futures rose on the back of falling US stockpiles. At the time of writing, WTI and Brent trade at $43.03/bl and $45.80/bl respectively. Gold continued its ascend, trading above $2,000/oz resistance level at $2,044.99/oz. Silver is $26.85/oz at the time of writing.


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COVID cases are rising across the globe as the delta variant spreads, this is causing some nervousness in financial markets, especially with the higher inflation rhetoric. Commodity prices have fallen since the Fed changed their tune inflation, the dollar has stabilised which has also been a headwind to prices. The summer months are traditionally quieter for metals demand which could prompt metals to consolidate. If the delta variant continues to spread, we may see higher levels of stimulus for longer. As things stand stimulus levels are set to be tapered and this could be brought forward if inflation remains high. We expect markets to remain volatile but on lower volume through the summer months.