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Daily Base Metals Report

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US stocks declined following a two-day gain, after inflation worries came to the forefront once more, and we expect Friday CPI figures to give the market a push in the direction as investors waver between tighter monetary policy outlook and softening economic growth. The dollar settled at around 102. The 10yr Treasury yield was mostly unchanged at 3.00%. The 10yr German bund yield rose to the highest level since 2014 ahead of the key ECB meeting tomorrow, with the markets expecting the interest rate to be unchanged for now but is set to wind down its asset purchases. Meanwhile, euro-area economic growth expanded by more than expected in Q1 2022, up by 0.6%, though the upgrade from 0.3% was mostly driven by trade than consumer strength. In China, tech stocks led another rally today, stoking hopes of an extended broad-based rally across equities.

Broadly positive sentiment was seen on the LME today, with most metals trading marginally higher, supported by the recovery in Chinese growth. Aluminium gained footing, climbing above $2,800/t to close at $2,819/t. Copper followed suit but struggled to break resistance at $9,740/t to edge lower to $9,730/t. Lead and zinc closed higher at $2,232.50/t and $3,821.50/t, respectively. Only nickel was down on the day as it struggled to break resistance at $29,400/t; the metal closed at $28,855/t. Likewise, iron ore fluctuated near the month high amid caution that demand recovery in China could lead to the nation attempting to stabilise the prices of raw materials. As restrictions were lifted, the metal gained more than 8%, and the inventories saw the first withdrawal in the latter part of May, with the level falling by more than 10%.

Oil futures broke above $120/bl, driven in large by a drop in US crude stockpiles. WTI and Brent now trade at $121.33/bl and $122.72/bl. Precious metals were mixed; gold and silver performance diverged, and the metals traded at $1,857/oz and $22.18/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 08.06.2022 as of 17:30


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