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Daily Base Metals Report

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US shares were mixed today as investors were hesitant about the direction of the US economic stimulus and general economic recovery. Adding to market uncertainty, the US labour data showed jobless claims fell by 228,000 to below 1m, the first time during this pandemic. This drop follows the expiration of enhanced unemployment benefits in July. The dollar continued its decline, and the US 10y yield picked up to 0.6801%. Germany recorded the highest number of new cases in more than three months, highlighting the new threat of the second wave in Europe.

The risk-off appetite caused LME metals to give back some of the recent gains. Aluminium prices traded down to $1,755/t, but support at this level triggered a close at $1,763.50/t. Copper fell the most to close at $6,256/t, near the day’s low, causing the spread to tighten further to $6.50/t backwardation. Selling pressure prompted nickel to close at $14,101/t, above support at $14,100/t. Zinc and lead prices also softened today, closing at $2,375/t and $1,943.50/t respectively. Tin remained on the back foot, closing at $17,500/t.

Oil futures dropped as overall demand outlook remains grim. At the time of writing, WTI and Brent trade at $42.37/bl and $45.10/bl. Gold and silver resumed their rally today, edging close to $1,944.41/oz and $26.69/oz respectively.


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