Most of the markets are down today, as investors assessed the impact of COVID-19 spread in Europe and the new variant found in South Africa. Information is still coming out, and therefore it is hard to judge the impact of COVID-19 on the markets into the next year. The key will be to watch out for government response to these outbreaks, whether through the imposition of lockdown restrictions or provision of economic relief, as we saw last year. The dollar and US Treasury yields sold off as investors pushed back the timing of the rate hike by the Fed.
The metals are all weaker across the board in line with the general sell-off seen in the markets. Nickel pulled back from 1-month highs of $21,240/t and has now breached support of $20,000/t to close at $19,897/t. Aluminium is seen falling towards the support levels of $2,600/t and $2,570/t, a robust level that the futures struggled to break below this month; the metal closed just above at $2,615/t. Zinc and copper sold off to close at $3,194/t and $9,460/t, respectively. Lead was the only one that managed to recover some of the earlier losses, closing marginally unchanged on the day at $2,269/t. More COVID restrictions would lead to further supply chain disruptions adding to tightness and keeping spreads in backwardation.
Oil futures collapsed by more than 10% today, as fears of new COVID-19 strain put in question the outlook for demand. WTI and Brent now trade at $68.84/bl and $73.40/bl, the September lows. In line with other safe havens, gold jumped higher in the first half of the day but quickly offset these gains and is now trading in line with yesterday’s levels of $1,784.16/oz; silver is trading at $22.94/oz.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 01.11.2021 as of 17:30