Written Commentary
BASE METALS
Copper: LME copper was down 2.4% at $14,000; US prices are down 2.14% to $6.4280. Risk appetite has weakened across the industrial metals space ahead of US midterm elections and broad worries over AI spending. US-Iran uncertainty is also keeping traders from adding fresh positions. China’s central bank announced it would raise the foreign currency requirements for domestic financial institutions in a bid to lower the yuan, a move that increases the cost of dollar-priced metals for Chinese buyers. Still, tight physical demand in China has kept prices well-bid as the Yangshan copper premium remains near $200. Cochilco, Chile’s copper commission, lowered its forecast for copper production this year while projecting softer than expected production in 2027. Cochilco estimates Chilean copper production in 2026 will fall 8.4% to 4.94 million metric tons, compared to August’s estimate of 5.27 million tons. Cochilco also expects 2027 production to rise 3% to 5.08 million tons, versus the August estimate of 5.55 million tons.
Zinc: Zinc fell 2.2% to $3,808.
Aluminum: Aluminum lost 1.8% to $3,040.
Tin: Tin slid 3.6% to $47,895.
Lead: Lead fell 0.7% to $1,892.
Nickel: Nickel eased 1.2% to $15,370.
PRECIOUS METALS
Gold: December gold contracts are modestly lower ahead of US midterm election results. A drop in oil prices overnight and a dollar that is little changed is offering some relief, though broader uncertainty is keeping investors on the sidelines. Gold falling below the $4,000 level offers central banks a cheaper opportunity for further purchasing, which would reflect a trend the market has seen over the last two years. That dynamic is likely to keep gold prices supported against further downside and offers a solid purchasing opportunity for investors. The World Gold Council cut its forecast for gold investment this year from 400 tons to 200 tons, amid weaker demand for bars and coins. However, the WGC raised its estimate for central bank purchases.
The market is likely to remain lightly traded heading into US midterms, though prospects of a US-Iran deal could see oil prices drop further and reduce Fed tightening expectations, leading gold higher. However, if current macro conditions hold, expectations of a move upwards in policy in December will continue to act as a headwind. October’s ISM manufacturing PMI increased to 55.5 from 54.5, while input prices remained elevated. That combination points to firmer activity without relief from manufacturing cost pressures, a dynamic that continues to argue for higher rates over the coming months. September’s PCE reading remains too firm to suggest that the Fed’s work is complete. December rate hike odds are priced at 75%. Friday’s payrolls will be central to determining whether labor-market resilience continues to justify another increase.
Silver: December contracts are up 1.54% to $50.095.
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