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Daily Base Metals Report

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US stocks edged lower on Friday after the Fed reiterated its resolve to continue hiking interest rates to calm inflation growth. Investors are now focussing on the Jackson Hole symposium next week for further clues on the monetary policy outlook in the coming months. The dollar gained a footing to 108, and the 10yr US Treasury yield edged higher into 2.9%. Elsewhere, in the UK, retail sales volumes fell unexpectedly by 0.3% in July, with costs of sales increasing by 1.3%. At the same time, GfK consumer confidence continued to decline in August, falling to a record low as concerns about recession and further price increases are putting pressure on household balance sheets.

China is said to start offering special loans to ensure infrastructure projects are delivered, adding further support to an industry grappling with an escalating debt crisis and slumping home sales. This news struggled to elevate the sentiment across the whole base metals group today, as trading was mixed. Nickel saw stronger upside momentum in the second half of the day as the metal jumped to $22,258/t. Copper struggled to find conviction as it traded almost sideways at $8,078.50/t. Likewise, zinc closed higher at $3,487.50/t. Aluminium and lead struggled to close higher day-on-day as both metals edged lower to $2,368/t and $2,042/t, respectively. Chinese banks are expected to reduce their benchmark loan prime rate for the first time in months following this week’s surprise decision to cut rates and withdraw liquidity from the market.

This should help spur borrowing and support sentiment in the meantime.
Oil futures finished the week on the back foot, despite today’s gains as the slowdown concerns offset the brighter-than-expected US demand outlook. WTI and Brent now trade at $91/bl and $97/bl. Precious metals weakened, with gold and silver falling into $1,749/oz and $19.11/oz, respectively.

For more in-depth analysis of base and precious metals, our Q3 2022 Quarterly Metals report is out now!

All price data is from 19.08.2022 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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