US stocks softened yesterday, as the markets lacked the conviction to breach record highs ahead of the Fed meeting tomorrow, where it is expected to accelerate the rate of its tapering given the persistence of inflationary pressures. The markets would likely price in earlier-than-expected interest rates next year if that takes place. The 10yr US Treasury yield gained ground, and the dollar fluctuated. US producer prices increased to almost 10% in November, the biggest jump since 2010, another signal showing no weakness in price growth.
The weakness intensified on the LME market yesterday. Aluminium fell below the support level of $2,630/t before closing at $2,628/t. Copper fluctuated but closed lower on the day at $9,412/t. Copper spread flipped back in contango for the first time since September, mostly driven by a rise in LME stocks last and this week. Nickel struggled above the $19,700/t price level and closed lower at $19,485/t. Zinc prices softened, piercing support of $3,300/t, a firm support level, but closed above at $3,304.50/t.
Oil futures declined after the IEA agency stated the global market has returned to surplus with the omicron stalling international travel. WTI and Brent fell down to $70.06/bl and $73.10/bl. Gold and silver tumbled after the producer price release in the US, falling down to $1,773.42/oz and $21.91/oz, respectively.
For more in-depth analysis of base and precious metals, please see our Quarterly Metals report.
All price data is from 14.12.2021 as of 17:30