Written Commentary
Base Metals
Copper: Copper prices are higher as US-China trade deal optimism lifted prices of the red metal. Benchmark copper on the LME was up 0.6% at $11,026, while US futures were up 0.6% to 5.1560. Also supportive of copper prices was new data that showed China’s industrial profits grew at their fastest pace in nearly two years in September. Industrial profits rose at an annual rate of 21.6% in September, the fastest pace since November 2023, following a 20.4% jump in August, data from the National Bureau of Statistics showed on Monday. Industrial profits grew 3.2% over the January-September period. China is also scheduled to release October’s purchasing managers index figures on Friday. Despite the growth in profits, the Yangshan copper premium shrank to $38 a ton from $58 a ton in late September and $100 in May, indicating purchases have yet to pick up pace.
Zinc: Zinc was up 1% at $3,054. Zinc stocks in LME-approved warehouses are at 37,050 tons, the lowest since March 2023 and down more than 80% since the middle of April. Worries about supplies on the LME market pushed the premium for the cash zinc contract over the three-month forward to a record high of $338.74 a ton. It was last around $250 a ton.
Aluminum: Aluminum up 0.3% to $2,868.
Tin: Tin climbed 1.2% to $36,225.
Lead: Lead advanced 0.4% to $2,024.
Nickel: Nickel was little changed at $15,360.
Precious Metals
Gold: Gold prices are lower, with December futures falling nearly 2% as hopes of easing US-China trade tensions lifted risk sentiment ahead of several central bank meetings this week. Treasury Secretary Scott Bessent said there was a “very successful framework” for President Trump and Xi to discuss Thursday, while a Chinese official touted a consensus on several issues. Bessent also said that the trade talks have eliminated the possibility of the US imposing 100% tariffs on China starting November 1, while he also expects China to delay the implementation of its rare earth and magnets licensing.
The Federal Reserve is expected to cut interest rates at the conclusion of its two-day meeting on Wednesday, as despite the absence of official US data, labor market weakness remains a priority. September’s CPI inflation report was tame. Headline CPI inflation rose to 3.0% from 2.9% in August on an annualized basis and was below expectations of a rise to 3.1%. Core CPI rose 0.2% on the month, a slower pace than the previous two months, at 0.3%, landing the annualized core figure at 3.0%, below expectations of a rise to 3.1%. The data solidified expectations that the Fed will cut rates this week and again in December. Regardless, markets will be closely analyzing remarks from the central bank for any signals on the interest rate path. Any hints that a December cut may not happen could act as a headwind for non-yielding gold.
Silver: Silver prices are lower, following moves in gold as a risk-on sentiment dented safe-haven demand.
Platinum: Platinum slipped 0.6% to $1,591.
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