Written Commentary
Base Metals
Copper: Copper prices fell, with LME prices nearing its lowest level in almost two weeks as dollar strength and demand concerns have dented prices. Benchmark three-month copper on the LME fell 2.4% to $10,624, down more than 5% from its all-time peak of $11,200 last week. The cash LME copper contract was trading at a $28 discount to the three-month forward, suggesting no pressing need for short-term metal.
US ISM manufacturing PMI data came in below forecasts of 49.5, with the index falling to 48.7 in October from 49.1 in September. The reading marks the eighth consecutive month of contraction in the manufacturing sector. Production shrank, and further contractions were also seen in new orders, inventories, and backlogs of orders.
PMI data from China also missed expectations. The RatingDog China General Manufacturing purchasing manager’s index fell to 50.6 in October from 51.2 in September, below expectations of 50.7. Only employment showed a positive month-on-month change, while all other indicators declined. It should be noted that the survey was taken when President Trump had threatened to impose 100% tariffs on Chinese goods. Monday’s reading was better than an official survey released on Friday, which showed that factory activity declined for the seventh month in a row. The official purchasing managers’ index fell to 49.0 in October from 49.8 in September, a six-month low, per the National Bureau of Statistics.
Glencore is planning to close its Horne smelter, Canada’s largest copper metal-producing operation, due to environmental issues and the millions of dollars needed to upgrade the facility, per a Reuters story. Industry sources estimate annual output at more than 300,000 metric tons, which would reinforce global supply disruptions. However, a spokesperson for the company said it is not currently considering closing the smelter.
Supply worries still remain supportive of prices in the short term. Copper output in Chile, the world’s largest producer of the metal, fell 4.5% year-on-year in September. Glencore lowered its annual copper production guidance to between 850,000 and 875,000 tons, versus 850,000 to 890,000 tons previously. Anglo American also reported a 9% drop in copper production in the first nine months of 2025. Meanwhile, Freeport-McMoRan lowered its sales outlook following the pause in operations at its Grasberg mine in Indonesia. Codelco’s El Teniente mine in Chile continues to see production issues, while problems in the Dominican Republic and the Democratic Republic of Congo have added further pressure to global supply.
Zinc: Zinc was down 0.6% to $3,083. The cash zinc contract is holding a $174 premium over the three-month forward amid low stocks.
Aluminum: Aluminum fell 1.4% to $2,860.50.
Tin: Tin was up 0.3% to $36,140.
Lead: Lead lost 0.2% to $2,023.
Nickel: Nickel slipped 0.2% to $15,115.
Precious Metals
Gold: Gold fell as a stronger dollar weighed on the metal, while mixed Fed speak offered traders a cautious view of the Fed’s move in December ahead of ADP payroll data out Wednesday. Chicago Fed President Goolsbee said he remains more concerned about inflation than employment, while Governor Cook pointed to rising risks of labor market weakness. San Francisco Fed President Daly urged officials to “keep an open mind,” and Governor Miran emphasized that policy remains restrictive. Markets are now implying a 68% chance of a Fed cut in December, down significantly after Fed Chair Powell said a December rate cut was not a foregone conclusion. Markets will also look to tomorrow’s ISM services PMI data for further clues on the health of the US economy after manufacturing PMI data showed a further contraction in manufacturing activity in the US alongside weak labor conditions and subsiding price pressures. Given that the US is a services-dominated economy, greater emphasis will be placed on the services reading. Gold will benefit from weaker US economic data and support the case for further Fed rate cuts.
Despite recent consolidation, gold prices remain well-supported as global demand hit a record high last quarter. Strong investment flows, robust bar and coin buying in India and China, and continued central bank purchases, including Brazil’s first in over four years, reinforce a solid floor for the yellow metal.
Silver: Silver fell lower, following moves in gold, with December US futures trading around $47.24 as markets await ADP jobs and ISM services PMI data for clues on how the Fed will move in December.
Platinum: Platinum rose 2.40% to $1,542.
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