Written Commentary
BASE METALS
Copper: Copper prices on the LME rose 0.4% to $14,215, after closing at an all-time high on Monday as support from tight inventories outside the US and reduced supply fears underpin prices; COMEX prices are up 0.63% at $6.65. Total available copper stocks in LME warehouses are around 100,00 metric tons to mark the lowest level since January, as flows to the US continue on worries of possible import tariffs. The cash-to-three-month spread remains in backwardation at $196 a ton, its highest level since October 2025, highlighting the tightness of supply ion the market. Available Chinese copper stocks in the LME, alongside other key suppliers like Chile, Zambia and the DRC have also posted declines in the LME warehouse system. Falling inventories outside the US have been the main catalyst in setting up bullish conditions for the metal despite the uncertainty over the status of US-Iran negotiations. However, the uncertainty over those dynamics could leave copper vulnerable to a modest pullback if negotiations deteriorate and if tomorrow’s US inflation data comes in stronger-than-expected. Still, structural factors will continue to underpin prices and are likely to outweigh near-term catalysts like US-Iran developments and CPI data over the medium-term. Strong demand for AI infrastructure buildout and supportive Q2 results from several large AI-names have also lifted sentiment and expectations that the new technology will support longer-term demand prospects.
Zinc: Zinc was steady at $3,739.
Aluminum: Aluminum was up 1.7% at $3,373. Supply worries are proving friendly to prices with available stocks at their lowest level since April 2025. Additionally, Reuters reported that Norsk Hydro’s Alunorte plant in Brazil has cut alumina output to 50% of capacity due to reduced supply of natural gas. The plant has annual production capacity of 6.3 million tons of alumina. LME-registered warehouse stocks are at 244,550 tons, the lowest since April 2025. Much of that supply is of Russian origin, which traders avoid.
Tin: Tin climbed 0.1% to $55,800.
Lead: Lead added 0.1% to $1,905.
Nickel: Nickel lost 0.6% to $16,830.
PRECIOUS METALS
Gold: December gold contracts moved higher overnight above $4,400, closer to the 200 day MA at $4,617. Unresolved US-Iran tensions are still capping gold’s upside as the threat of higher energy prices and inflation are underpinning the dollar and higher Treasury yields ahead of tomorrow’s data, which could significantly influence the outlook for the Fed. A benign CPI print could help ease fears about Fed Chair Warsh and the central bank being dovish, which should also help bring longer-end rates lower and offer relief for gold. Despite the futures market shift the Fed likely remains biased toward higher rates, as despite July’s lack of hiring and downward revisions to prior months, the breakeven pace of job gains is fairly lower than in previous years. Gold could continue to breakout if Treasury yields continue to retreat and tomorrow’s inflation data proves benign. However, with crude having maintained a range near $82bbl, inflation sensitivity likely remains present in the economy and focus will center around underlying inflation trends.
Silver: September contracts are down 0.1% to $65.17.
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