Written Commentary
BASE METALS
Copper: Copper prices on the LME gained 1.4% at $14,725 as buyers in China continue to underpin prices among expectations of a wave of seasonal buying in the country. The demand from China is not limited to just exchange purchasing, as physical buying has moved the Yangshan copper premium, a gauge of Chinese demand for copper imports, up nearly 70% in September to $119 a ton, easing from Friday’s $124. In part this is thanks to a tight scrap market domestically, which has the added effect of limiting smelting capacity in the country. This week’s Xi-Trump summit will be closely watched for any new trade dynamics that could benefit copper demand.
Meanwhile, the premium of COMEX over LME widened, which could encourage further copper to leave LME warehouses toward the US. Last week the premium narrowed to a level which discouraged the shipment of LME copper to the US. Available copper stocks in LME-registered warehouses fell to 133,725 tons, after 9,600 tons of fresh cancellations in Asia. The premium of the cash contract over the three-month forward rose to $47 from a discount of $86 at the start of last week.
Zinc: Zinc was up 0.3% at $3,930.
Aluminum: Aluminum fell 0.5% to $3,272.
Tin: Tin gained 0.6% to $54,040.
Lead: Lead was up 0.3% at $1,927.
Nickel: Nickel added 0.5% to $16,260.
PRECIOUS METALS
Gold: December gold contracts edged lower and are finding support near the $4,400 level as the dollar maintained recent strength, while Treasury yields edged lower and global equities rallied. The dollar’s maintained strength from Friday is likely resulting in a wave of profit-taking from investors as they position into equities. President Trump signaled that he would be open to the prospect of meeting Iranian President, Masoud Pezeshkian. This comes as world leaders will gather in New York for the U.N. General Assembly, where the president will also meet with Gulf leaders for broader talks over security in the region. Elsewhere on the geopolitical trade front, President Trump and Chinese President Xi will be meeting on Thursday, where it is expected that the two sides will advance their current trade truce and discuss potential agreements on AI-safeguards. Persistent inflation and further policy tightening from the Fed present downside risks for gold, which could pull it closer to $4,000. The upside story would be a de-escalation event between the US and Iran that would ease inflationary risks, leading to lower yields and a softer dollar.
Silver: December contracts are little changed at to $66.50.
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