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Daily Base Metals Report

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US stocks extended the rally to reach all-time highs as investors’ confidence was spurred on by ultra-loose monetary policy. The Fed stated it plans to keep interest rates near zero for five years or more after it adopted a new strategy of a more relaxed approach to inflation and unemployment indicators. US durable goods orders rose in July, almost doubling the estimates, as factories experienced faster growth than the rest of the economy during the month. The dollar continues to erase gains, and the 10yr yield on Treasuries advanced to 0.7096%. In the latest round of US-Sino talks, China has made concessions proposing to let the US regulators audit its most sensitive companies.

Prices on the LME were firmer today as US orders for durable goods rose in July; lead and zinc failed to gain a footing on the upside. Copper prices were well bid and found support at $6,580/t, as protracted buying pressure caused a close on the front foot at $6,594/t. Aluminium was marginally stronger, but closed below the resistance of $1,785/t at $1,780/t; the cash to 3-month spread widened further to -$41.51/t. Nickel prices challenged resistance at $15,200/t, as Chinese imports of raw material continued to advance, but closed at $15,159/t. Lead drifted lower, testing the support level of $1,970/t and closing at $1,977.50/t.

Oil futures slipped from a 5-month high as the hurricane approaches the Gulf Coast. At the time of writing, WTI and Brent trade at $43.44/bl and $45.85/bl. Gold and silver traded higher, to $1,940.95/oz and $27.03/oz respectively.


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