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Daily Base Metals Report

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US stocks gained ground while European stocks hit record highs on the back of positive corporate earnings report. US household debt rose at the fastest pace since 2013 in Q2, driven by the mortgage boom. The dollar was little changed, while the 10yr US Treasury yield fell to test 1.1475% once again. From the Fed, Governor Waller stated that he would back the tapering announcement in September if the labour market continued to recover.

Metal on the LME sold off yesterday, with copper suffering another day of losses, closing at $9,541.50/t. Aluminium prices sold off to test appetite at $2,583/t, but support at that level triggered a close at $2,586/t. Nickel lost the ground, closing at the day’s lows at $19,388/t. Zinc remained under pressure, especially in the second half of today, selling off to close at $2,969.50/t. Lead tested the $2,370/t level to close higher at $2,398/t; cash to 3-month spread tightened up to $14.74/t.

A decline in oil futures continued to deepen yesterday, supported by the muted demand outlook. WTI and Brent edged lower to $70.80/bl and $72.61/bl. Precious metals were mostly lower, only with silver edging higher to $25.52/oz; gold fell to $1,810.38/oz.

For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.

All price data is from 03.08.2021 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.

This report is not subject to any prohibition on dealing ahead of the dissemination of investment research. Accordingly, the information may have been acted upon by us for our own purposes and has not been procured for the exclusive benefit of customers. Sucden Financial believes that the information contained within this report is already in the public domain. Private customers should not invest in these products unless they are satisfied that the products are suitable for them and they have sought professional advice. Please read our full risk warnings and disclaimers.

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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.