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Daily Base Metals Report

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Stocks slumped today as volatility spiked on the back of President Trump's positive test for coronavirus. In the US, renewed stimulus talks remain in limbo after the House passed a Democrat-only $2.2tr package. US jobs gains moderated in September, up by 661,000, as Americans slowed down on their job search; the unemployment rate fell to 7.9%. The yen edged higher on the back of increased uncertainty to the November presidential elections. The pound gained on the news of Boris Johnson intervening in the Brexit negotiations for the first time since June.

LME metal prices were on the front foot today despite Trump's positive coronavirus test. Aluminium prices were well supported in the second half of the day and tested resistance at $1,770/t and closed just off the highs at $1,768/t. Copper was well bid, testing the resistance level of $6,580/t, before closing below at $6,553/t. SHF copper, however, was lower on the day, closing at CNY50,940/mt. Nickel closed higher on the day at $14,418/t; cash to 3m spread tightened into -$11.00/t. Zinc and tin consolidated, closing at $2,327/t and $17,815/t respectively. Lead prices weakened to close at $1,771.50/t.

Oil futures extended losses, with WTI and Brent edging down to $37.55/bl and $36.69/bl respectively. Precious metals were weaker; at the time of writing, gold and silver trade at $1,900.17/oz and $23.80/oz.


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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.