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Daily Base Metals Report

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The new quarter has seen US equities continue to rally, but gains were modest in Europe today with the Dax weaker. The dollar decline continued to 93.72 at the time of writing, despite US ISM manufacturing showing strong grow at 55.4. Personal spending and income were 1% and -2.7% respectively for August. Initial jobless claims were 837,000 with continuing claims at 11.76m. Brexit talks continue and there are still differences on the UK's state-aid policy and access the EU boats. 

Metals on the LME came under heavy selling pressure today, with copper the worst affected. Protracted selling pressure and a rejection of prices above $6,700/t caused prices to take out multiple support levels and close at $6,387/t. Zinc was next in line as prices struggled above $2,400/t to close $2,326.50/t. Nickel managed to find support at $14,210/t and closed at $14,343/t with the cash to 3-month spread at $38.75/t. Primary aluminium broke below support at $1,750/t to close at $1,739.5/t, as LME inventories decline. Lead was weaker as well today but was supported below $1,800/t to close at $1,807/t.

Energy prices were also down today as the market continues to fear for demand due to uncertainty surrounding the US stimulus package. Brent and WTI trading at $40.52/bl and $38.24/bl respectively. Gold and silver acted like traditional safe havens today, gaining ground to $1,909.50/oz and $24.02/oz respectively. 


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