US stocks slumped after Jerome Powell’s speech today at the Jackson Hole symposium, warning against the premature loosening of monetary policy. He reiterated the Fed’s resolve to continue raising rates and hold them at a higher level until the policymakers are confident that inflation is under control. This has also offset the lower spending data out of the US today, as it increased by 0.2%, which further indicates softening demand conditions in the economy; the key inflation metric, the PCE index, turned negative. On the other hand, consumer sentiment rose by more than expected in August on the back of easing pressures coming from the inflation reading. The dollar and the 10yr US Treasury yield both weakened slightly.
Anticipation of Powell’s speech, as well as the subsequent statement, gave some metals a strong boost later on in the day. Aluminium jumped higher to test the resistance at $2,515/t before settling at $2,493.50/t. Copper gains were much milder as resistance at $8,300/t urged the metal back down to $8,160.50/t. Lead and zinc both closed higher at $1,985.50/t and $3,565.50/t, respectively. Nickel was the only one down on the day as it fluctuated between gains and losses; the metal now trades at $21,633.50/t. The recent Chinese stimulus to be directed towards the infrastructure industry is also helping support the prices at current levels. Iron ore continues to rise, closing higher week-on-week to $106/me; shipments of iron ore to China have recently declined, helping to support the market.
Oil futures wavered today as the traders assessed Powell’s remarks, with WTI and Brent at $92/bl and $99/bl. Gold and silver weakened to $1,736/oz and $19.02/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 26.08.2022 as of 17:30