Written Commentary
Base Metals
Copper: Copper prices on the LME were little changed at $10,775 earlier in the morning. Markets are largely awaiting industrial profit figures from China on Thursday, following strong readings in August and September. Focus will also center around government efforts to reduce excess capacity. Expectations of Fed rate cuts in December have lifted sentiment and brought the dollar lower, which should given copper on opportunity to steady. However, increased warehouse stocks and declining supply risks give reason to believe that prices may not break above the $11,000 mark.
Copper inventories at COMEX warehouses exceeded 400,000 tons or one-quarter of the US’s annual demand, for the first time, as arbitrage shipments to the US draw metal into the states. The huge run-up in inventory levels began in March as traders rushed to ship metal to the United States before President Trump’s planned import tariffs. However, refined copper was ultimately given an exemption from the 50% import tariffs that came into effect. Inventories have continued to build because the status of copper imports remains under review. Commerce Secretary Howard Lutnick is due to provide Trump with an update on domestic copper markets by the end of June 2026.
Zinc: Zinc edged up 0.1% to $2,992. The premium for cash zinc contract over the three-month is around $135, still elevated despite zinc stocks in LME registered warehouses being at 47,425 tons. A gain of 40% since the start of November.
Aluminum: Aluminum rose 0.8% to $2,807.
Tin: Tin added 1% to $37,250.
Lead: Lead firmed 0.1% to $1,982.
Nickel: Nickel climbed 1.3% to $14,635.
Precious Metals
Gold: Gold prices slipped as markets evaluate the prospects of a rate cut from the Fed after recent comments from NY Fed President John Williams lifted bets on a December cut. Williams had said on Friday that interest rates could fall without putting the Fed’s inflation goal at risk, while helping guard against a slide in the job market. Bets of a rate cut next month have surged to 75% from as low as 30% during trading last week. Gold will likely receive a bounce higher if the Fed moves to cut rates; however, upcoming data on the health of the economy is likely to provide the metal with direction until the Fed’s meeting in December. PPI inflation, retail sales, and weekly jobless claims data will all be out before Thanksgiving.
On the geopolitical front, the US. and Ukraine are set to continue work on a plan to end the war with Russia after agreeing to modify an earlier proposal that was widely seen as too favorable to Moscow.
The long-term outlook for gold will remain supported by continued central bank purchasing.
Silver: Silver futures fell 0.2% to $49.80.
Platinum: Platinum was up 1.3% to $1,545.
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