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Daily Base Metals Report

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US stocks tumbled as market participants returned from a national holiday, as recession fears gripped the market sentiment. US and China are continuing to hold discussions surrounding the removal of import tariffs; however, the progress failed to spur sentiment, as many belief it will not have a strong impact on inflation. In the meantime, however, the probability of recession in the US within a year continues to rise, and has now reached 38%, as interest rates rise, according to Bloomberg Economics. The dollar shot up above 106 and the 10yr US Treasury yield weakened into 2.78%. In the meantime, the euro plunged to 1.02, near parity, against the dollar on rising bets of slower interest rate increases this year to avoid sharp recession.

The risk-off sentiment intensified today, with strong declines seen across the metals; only nickel traded higher on the day. The metal shot up in the latter half of the day but struggled to break above yesterday resistance of $23,000/t and closed at $22,652/t. As recessionary fears trickled through the markets, the rest of the base metals group declined during the day. Aluminium fell into support of $2,380/t to close higher into $2,392/t. Copper slid, falling below $7,700/t to $7,670/t, December 2020 lows. Lead softened to close at $1,939/t; zinc losses were much stronger, as the metal closed below $3,000/t at $2,992/t. Iron ore settled at $109/mt after consecutive declines after reports showed steelmakers in China gathering together to find measures to stabilise the market.

Oil followed the downward trend today, with WTI and Brent falling back down to $100/bl levels; WTI now trades below at $98/bl. Gold sold off reaching December lows of $1,769/oz; silver traded at $19.22/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 05.07.2022 as of 17:30


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