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Daily Base Metals Report

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US stocks rebounded slightly today following a volatile session earlier in the morning. US 10yr treasury yield declined further as investors turned to bonds as means of insurance amid deteriorating equity performance. Meanwhile, the Fed policymakers reconfirmed the tighter monetary policy outlook ahead. The dollar weakened significantly. Previously owned home sales in the US fell to the lowest level since summer 2020 in April, driven in large by diminishing inventory and rising prices. In a similar vein, US initial jobless claims increased to 218,000 in the week ending May 14, the highest level since January this year, another sign of labour market moderating growth.

Performance across the base metals started off on a mixed note, however, a softer dollar and illiquid market helped support prices in the latter half of the day, as all metals closed higher today. Nickel's response was particularly acute, as it gained 4.00% to break above $27,400/t to close at $28,231/t; volumes, while recovered from April lows, remain lacklustre. Copper fell to test $9,159/t in the early hours before rebounding from that level to close at $9,415.50/t. Likewise, iron ore rebounded after hitting a 4-month low at $120/mt after the markets assessed the implications of stimulus pledges from China, and local governments were told to act decisively on measures to support growth in the coming weeks. Lead and zinc closed higher at $2,063/t and $3,714.50/t.

Oil fluctuated, with both WTI and Brent trading at $110/bl at the time of writing. China is in talks to replenish its strategic reserves by purchasing crude from Russia, a sign of strengthening relations between the two economies. Precious metals gained footing, with gold and silver edging higher to $1,840/oz and $21.84/oz, respectively.

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

All price data is from 19.05.2022 as of 17:30


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