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Daily Base Metals Report

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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

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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