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Daily Base Metals Report

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Authors
Daria Efanova

Daria Efanova Head of Research

Contact research Contact Industrial Commodities

US stocks opened higher today following the news of Joe Biden withdrawing from the presidential race. The announcement had little impact on the markets, with the dollar index remaining mostly unchanged at 104.35 and the 10-year US Treasury yield holding steady at 4.22%. Investors are now awaiting the release of the PCE index tomorrow, which will provide insights into fluctuations in living expenses and consumer spending in the US. This information is crucial as investors focus on the Fed’s next moves in monetary policy. We expect to see further softening in price pressures, reinforcing investor bets on the first interest rate cut in September.

Base metals continued to weaken today, driven by long liquidation, prompting the complex to test the robust support levels. In particular, copper is testing the $9,200/t support as aluminium is weakening towards the $2,300/t level. A similar trend was seen across the rest of the complex, erasing the gains made in Q2 2024. With a quieter trading period and uncertainty about the future pricing path, we expect that longs have unwound their positions. Given a stable volatility environment, we believe that market movements are gradually softening rather than undergoing a rapid sell-off. Therefore, if prices do not break the strong support levels in the near term, we could potentially see a slight trend reversal.

Precious metals softened today. Gold pulled back from its recent record price, trading below the $2,400/oz level again, while silver declined below $29/oz. Oil prices also fell, with WTI and Brent crude trading at $79.9/bbl and $82.3/bbl, respectively.

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All price data is from 22.07.2024 as of 17:30

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