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Daily Base Metals Report

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US stock markets came to a halt today after sessions of positive growth as investment sentiment soured. The Fed promised to keep the interest rates pinned to zero, and the Biden administration continues to have talks with Republican senators. Inflation concerns continue to rise as the spread between the 30yr US Treasury yield and the German equivalent reached its widest since 2011. The dollar slipped, and the 10yr yield fell down to 1.1447%. On the virus front, the WHO rejected the theory that the virus came from a Chinese lab, instead claiming it to be coming from an animal source. Elsewhere, the Lunar New Year public holidays commence in Asian countries, with China breaking for a week.

LME metal prices were well bid today as risk appetite re-emerged. Copper prices were firmer, heading for the third straight gain, however lack of appetite for prices above $8,170/t triggered a close at $8,147.50/t. Nickel prices broke through the resistance of $18,350/t and closed higher at $18,370/t. Aluminium prices were also higher and closed at $2,054/t; cash to 3m spreads widened out to -$6.50/t. Zinc prices opened on the front foot today, breaking through the key resistance level of $2,690/t to close at $2,695.50/t. Lead prices higher down on the day, closing at $2,078.50/t. According to SMM, China’s refined output of zinc, tin and copper fell in January, only with aluminium output seen higher.

Oil futures remained on the front foot, with WTI and Brent trading at $58.13/bl and $60.96/bl. Precious metals were mixed, but silver and gold were seen higher at $27.34/oz and $1,837.50/oz, respectively.

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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.

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