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Daily Base Metals Report

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US stocks fluctuated today as markets brace for the Fed decision tomorrow. The US central bank is expected to hike aggressively to combat persistently high inflation, and today’s PPI figures solidify the case for persistently high prices in the near term. The producer prices surged by 10.8% y/y in May. The 10yr US Treasury yield stabilised at 3.43%. The dollar trades at 105. In the meantime, UK real wages fell by the most in at least 21 years as wage increases struggled to keep in line with price increases; real average earnings fell by more than 3.4% y/y in April.

The weakness was persistent but softened on the LME markets today following disappointing data for US producer prices. Tin continued to suffer heavy losses for the second day in a row, erasing as much as 13% so far this week to close at $31,093/t. With the soldering metal prices slumping to the year’s lows, there are signs that the Chinese are cutting output to below 40% of design capacity to deal with the decline. Aluminium continued to weaken, breaching support at $2,600/t to close at November lows of $2,570/t. Copper tested the resistance of $9,380/t before selling off in line with the rest of the base metals to close at $9,230.50/t. Lead and zinc closed at $2,075.50/t and $3,596.50/t, respectively.

Oil prices gained footing today as hopes of robust demand offset the worries about inflation. WTI and Brent settled at $122/bl and $124/bl, respectively. European gas prices jumped by more than 20% following the news that Gazprom will halt nearly 40% of flows through its Nord Stream pipeline following a technical issue. Precious metals declined today, with gold and silver only seeing moderate declines to $1,810/oz and $20.92/oz.

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

All price data is from 14.06.2022 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.

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