Written Commentary
BASE METALS
Copper: Copper prices rose overnight as mine supply concerns continued to lift prices. LME copper rose 0.8% to $14,657, while US prices rose 1.10% to $6.76. Chilean miner Codelco announced a partial suspension at their El Teniente mine after a landslide killed two workers on Sunday. Meanwhile, a strike at Antofagasta’s Centinela copper mine in Chile continued, with negotiations set to resume on Tuesday. Tightness is also visible in global warehouses outside the US: the premium of LME cash copper over the three-month held near $181 a ton, a sharp reversal from last month’s discount of $86.
The Yangshan copper premium closed last week at $135 a ton, a four-year high, as traders returned from holiday. SHFE inventories closed the week at 58,744 tons, up 20,000 tons last week, which marked a near three-year low. Total stocks at LME-registered warehouses dropped to a six-week low of 233,025.
Zinc: Zinc fell 1.3% to $3,758.
Aluminum: Aluminum was up 0.3% at $3,058.
Tin: Tin climbed 3.0% to $53,000
Lead: Lead eased 0.2% to $1,884.
Nickel: Nickel gained 1.1% to $53,595.
PRECIOUS METALS
Gold: December gold around 0.50% overnight to below $4,200 as a stronger dollar and higher shorter-term yields weighed on the metal. Inflation and growth data will remain central to the near-term policy outlook. renewed energy-market risks ahead of this week’s inflation data. Oil remains an important restraint on sentiment. Brent briefly rose above $106 following deadly strikes on Riyadh’s international airport, although gains were tempered by President Trump’s announcement of a Russia–Ukraine agreement to halt attacks on energy infrastructure. Details remain uncertain, and renewed Houthi attacks have limited confidence that the arrangement will deliver lasting energy-price relief. Markets assign an 81% probability to unchanged Fed policy this month. Softer recent inflation and employment data have reduced expectations of an immediate follow-up to September’s hike, even as energy prices leave the subsequent policy path uncertain. Wednesday’s September CPI report is therefore pivotal.
The Fed outlook remains as a broad headwind for gold. September’s meeting minutes showed policymakers discussed agreed that the labor market was near maximum employment and growth remained solid, reducing the need to protect against downside employment risks. The main policy question was not September’s hike, but how much further to tighten: most expected another hike by year-end, although they differed over whether it was needed under their baseline outlook or primarily as insurance against upside inflation risks. Recent survey evidence has continued to support the idea that economic growth remains robust, which gives ample reason to expect yields will move modestly higher over the next couple of months following their rapid rise recently. These dynamics are likely to contribute to a challenging environment for gold over the coming months.
Silver: December contracts are down 0.20% to $60.93.
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