US stocks reversed the bear trend today, with S&P 500 edging slightly higher after five days of consecutive declines. The sentiment improved slightly after the markets assessed the economic data pointing out that the overall state of the economy, whilst decelerating, is not on the brink of recession. US consumer confidence rose for the second straight month in September, as falling energy prices eased consumers’ worries about their disposable income. US business equipment orders rose in August by the most since the start of the year. Likewise, US new home sales rose unexpectedly in August, highlighting another wave of buying ahead of another round of tightening cycle from the central bank. The dollar softened for the first time in two days while the US 10yr Treasury yield continued higher, testing the 4.00% level. Elsewhere, the pound settled at yesterday’s close at 1.07.
From the metals prospectively, dollar softness provided some metals with support today; across the complex, the trading was mixed. Nickel spreads fell to the deepest discount since 2008 as strong dollar and higher borrowing costs made it more expensive for banks to finance their positions in recent days. This is especially true for institutions in Europe where the financing is done in euros for dollar-based deals. Nickel continued to decline, edging slightly lower to $21,858/t. Likewise, aluminium struggled above the resistance level at $2,150/t, deepening its lows into the levels not seen since February 2021. Zinc closed lower at $2,861.50/t. Lead, however, managed to find support at $1,750/t but a lack of appetite above current levels meant that the metal closed at $1,748.50/t.
Meanwhile, Germany suspects that the damage done to the Nord Stream pipeline was a result of sabotage, creating further tightness in the market. As a result, EU gas prices jumped 12%. Oil futures also rose, with WTI and Brent jumping to $78/bl and $86/bl. Precious metals recovered some of yesterday’s losses, and gold and silver now trade at $1,636/oz and $18.63/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 27.09.2022 as of 17:30