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Daily Base Metals Report

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US stocks were on the front foot today on the back of growing hopes of vaccine distribution and progress in the stimulus bill talks. The number of coronavirus cases continues to rise globally, and many countries are considering the introduction of stricter lockdown measures over the Christmas period. Moderna vaccine is found to be 94.1% effective at preventing COVID-19, ahead of the final FDA decision this Thursday; Europe hopes to begin distribution of vaccine by Christmas. Joe Biden has been confirmed as president-elect by the Electoral College today. The dollar softened, and the 10yr US Treasury yield strengthened up to 0.9080%. The pound rose to 1.3446 against the dollar amid hopes Brexit negotiations will reach a final deal soon.

LME metals have been mixed, with copper and lead higher on the day. Aluminium prices edged lower today, breaking below $2,035/t to close at $2,029.50/t, the cash to 3-month spread has widened out once again to -$16.00/t. Nickel was supported at $17,500/t and closed just above the day’s lows at $17,577/t. Lead was mostly range-bound and tested the resistance level at $2,055/t before closing at $2,052/t. Copper traded higher to the $7,830/t resistance level but closed on the back foot below at $7,782/t. Zinc was weaker today, closing at $2,814.50/t.

Oil futures rose today, supported by the progress in US stimulus bill talks. At the time of writing, WTI and Brent trade at $47.58/bl and $50.75/bl. Precious metals were all stronger today, with gold and silver edging up to $1,847.89/oz and $24.40/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.

A large number of views are being generated at all times and these may change quickly. Any valuations or underlying assumptions made are solely based upon the author’s market knowledge and experience.

Please contact the author should you require a copy of any previous reports for comparative purposes. Furthermore, the information in this report has not been prepared in accordance with legal requirements designed to promote the independence of investment research. All information in this report is obtained from sources believed to be reliable and we make no representation as to its completeness or accuracy.

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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.