Metals Daily

This MorningOvernight on the London Metal Exchange, metals traded higher across the board, led by nickel and tin. Three-month nickel rose 1.1% to $15,435/t, while tin also gained 1.1% to $43,435/t, highlighting ongoing market tightness. Aluminium added 0.6% to $2,946/t, with copper and lead posting more modest increases of 0.1% and 0.5% respectively. Zinc edged up 0.2%, rounding out a generally firm overnight session supported by improved sentiment and currency tailwinds.What's Moving MarketsGlobal metal markets moved higher over the past 24 hours, supported by a combination of renewed geopolitical uncertainty, a softer U.S. dollar, and continued tightness in several key metals markets.Market participants also pointed to positioning ahead of upcoming U.S. economic data, with traders reluctant to add long dollar exposure. This environment tends to favor gold and silver, which often benefit from both risk aversion and dollar weakness.Base metals supported by supply concerns Industrial metals, particularly copper, remained firm as markets continued to focus on structural supply tightness. Smelter constraints, limited mine output growth, and ongoing disruptions in global supply chains are keeping inventories under pressure. These dynamics continue to support prices on the London Metal Exchange, even in relatively quiet end-of-year trading conditions. While demand growth remains uneven across regions, the absence of meaningful supply relief is keeping downside risks limited for base metals in the short term.Currency markets added another supportive layer for metals. Since yesterday morning, the EUR/USD exchange rate edged higher, driven primarily by broad U.S. dollar weakness rather than euro-specific news.The dollar came under pressure as global markets priced in slower U.S. momentum and maintained expectations of easier monetary policy ahead. Moves in other major currencies, including a stronger Japanese yen amid intervention warnings, reinforced the broader dollar sell-off. With no major euro-area data releases, the euro benefited by default from the shift in dollar sentiment.For metals markets, a firmer euro versus the dollar typically improves purchasing power for European buyers, which can lend additional support to physical demand and spot pricing.Gold and silver prices advanced as investors sought safe-haven assets amid ongoing geopolitical tensions. At the same time, the U.S. dollar weakened modestly across major currency pairs, making dollar-denominated metals more attractive to non-U.S. buyers. Currency movements were a key short-term driver, reinforcing the upward momentum in precious metals. OutlookTaken together, geopolitical uncertainty, persistent supply tightness in base metals, and a weaker U.S. dollar created a constructive backdrop for metal prices over the past day. While trading volumes remain seasonally thin, currency moves and risk sentiment continue to play an outsized role.In the near term, markets will remain sensitive to further currency fluctuations and any unexpected macroeconomic signals, particularly from the United States, that could either reinforce or reverse the current momentum.