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Daily Base Metals Report

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Global stocks climbed today on the back of rebounding tech shares. The number of infections continues to climb, with the US continuing to break record hospitalisations and deaths; cases in Europe seem to have peaked amidst new round of lockdown measures. The dollar strengthened up to 93.112 and the 10yr yield on US Treasuries remained relatively unchanged. In the UK, London apartment prices fell further in September, as buyers struggle to get mortgages and people consider moving out of the capital. A day after the Pfizer announcement, Russia stated today that the Sputnik V vaccine is 92% effective.

Activity on the LME was mixed today with only aluminium and lead closing higher. Zinc was subject to strong selling pressure, testing the support level of $2,600/t and closing at $2,624/t. Copper prices were softer in the second half of the day, closing lower at $6,885/t. Nickel gave back this week’s gains, closing on the back foot at $15,971/t; cash to 3-month spread tightened into -$35.00/t. Lead tested resistance at $1,880/t before closing lower at $1,874/t. Aluminium prices remained range-bound, closing marginally higher on the day at $1,918/t.

Oil futures surged above $45/bl in London for the first time in ten weeks. At the time of writing, WTI and Brent both trade lower at $42.22/bl and $44.42/bl. Precious metals were all lower on the day, with gold and silver edging down to $1,864.87/oz and $24.21/oz respectively.

Disclaimer

This is a marketing communication. The information in this report is provided solely for informational purposes and should not be regarded as a recommendation to buy, sell or otherwise deal in any particular investment. Please be aware that, where any views have been expressed in this report, the author of this report may have had many, varied views over the past 12 months, including contrary views.

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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.