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Daily Base Metals Report

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US stock fluctuated on the back of Biden’s plans to inject $2.25tr into infrastructure. From the virus front, as the US vaccine rollout is surpassing targets, Biden unveiled the new strategy that plans to have 90% of adults will be eligible to receive the jab by April 19th. The US private employers added the most jobs in six months in March, another encouraging sign in the labour market recovery. The US 10yr treasury yield rose for the fourth consecutive day, while the dollar dropped, still closing one of the best quarters in a year.

LME metal prices were on the front foot today, apart from zinc and aluminium, which closed lower on the day. Copper prices were well supported and tested resistance at $8,850/t and closed lower at $8,785.50/t; the cash to 3-month spread tightened up to $2.5/t. Nickel was well bid in the second half of the day, testing the resistance level of $16,170/t, before closing below at $16,068/t. Lead prices remained supported above $1,965/t before closing at $1,974.50/t. Aluminium and zinc were range-bound but closed lower on the day at $2,212/t and $2,818.50/t respectively.

Oil futures slipped on the back of the strong dollar, ahead of the OPEC+ meeting discussing production levels for May. WTI picked up higher to $60.87/bl, whereas Brent fell down to $63.89/bl. Precious metals rose, with gold and silver increasing up to $1,707.50/oz and $24.32/oz respectively.

All price data is from 31.03.2021 as of 17:30

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.