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Daily Base Metals Report

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Equity markets in Europe were marginally firmer today, in the US, the DOW is up over 1% at the time of writing but the S&P 500 struggles for momentum. Pres. Trump signed executive orders to extend assistance for the unemployed, payroll tax deferral, eviction protection and student loan-relief. According, to Washington, there are still talks between Democrats and Republicans above another relief package. We are seeing more cases in Europe, and there is a risk that the UK will place more countries on the quarantine list.

LME trading saw mixed appetite today. Aluminium has continued to find support at $1,750/t and broke higher to close at $1,786/t. The cash to 3-month spread remained wide at -$35.44/t contango. Copper was stronger after recording a low for the day at $6,234/t, the market closed at $6,396.50/t. The cash to 3 months spread tightened into $2/t back but closed at $2.75 contango. Elsewhere, Nickel rejected $14,400/t and closed on the back foot at $14,286/t. Lead closed at $1,899/t, down on the day and just below key support as zinc consolidated after failing above $2,400/t, and closed at $2,397/t.

Energy prices were supported today after Saudi Aramco suggested demand will continue to improve. Brent and WTI trading at $45.07/bl and $42.08/bl respectively. Gold has struggled on the upside today and trades at $2,029/oz as silver was well bid trading at $28.88/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.