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Daily Base Metals Report

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US stocks opened the month on the back foot as solid economic data suggested the Fed has not tightened monetary policy enough to tamper the inflation and, in turn, growth. US manufacturing PMI rose unexpectedly, back up to 56.1, up from 55.4 in the previous month. US job openings have declined from record highs to 11.4m in April, suggesting little relief for companies that struggle to find employees. While some data has started to slow, overall, the resilience of an average consumer has kept the pace of growth robust in comparison to other economies. Meanwhile, US consumer confidence dropped to the lowest level since February in May, with the impacts of inflation continuing to weigh on consumers. The dollar shot up to 102.70, and the 10yr US Treasury yield edged higher to test the 2.92% level. European stocks continued to decline after the record high inflation reading on Tuesday.

A mixed metal performance on the LME today as investors priced in initial lift off lockdown restrictions in China. Shanghai reopened for the general public today, however companies warned that they can’t fully restart their operations despite the restrictions lift-off given the prevalent supply chain issues. Aluminium extended losses and the metal closed lower at $2,726/t. Tin started off on the back foot but managed to close marginally higher at $24,929/t. Likewise, copper shot up to test the resistance of $9,550/t before closing at $9,499.50/t; cash to 3-month softened into -$5.00/t. Lead and zinc closed slightly lower on the day at $2,169/t and $3,864.50/t, respectively.

Oil futures rose ahead of the OPEC+ meeting in the evening to discuss supply policy and projections. WTI and Brent now trade at $116/bl and $117/bl. Precious metals were mostly higher despite stronger dollars, with gold and silver increasing to $1,844/oz and $21.82/oz, respectively.

For more in-depth analysis of base and precious metals, our Q2 2022 Quarterly Metals report is out now!

All price data is from 02.06.2022 as of 17:30


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