Daily metals

Global equities recouped some losses and edged higher after President Trump stated that the war in Iran may be approaching its end. Donald Trump said the war against Iran was 'very complete, pretty much' as he declared there was 'nothing left in a military sense' in the country. Oil prices dropped sharply following the US president's comments. Energy markets face extreme volatility amid the prospect of sustained disruptions to supplies. Gold remains under pressure over inflation concerns. Metals and bulk commodities were broadly higher. Yields on 10-year US Treasuries were steady at 4.11%, while the USD index was 0.6% weaker at 98.6. Precious metals rallied as the USD weakened after President Trump suggested the conflict in the Middle East may end soon. Trump on Monday sought to reassure markets amid ongoing military tensions with Iran, describing the operation as a “little excursion." In response, Iran stated that it will decide when the conflict concludes. Earlier concerns that a prolonged conflict in the region could trigger a spike in inflation had prompted traders to scale back expectations for Fed interest rate cuts this year. Markets now imply roughly 40bp of easing by year-end, down from over 55bp in late Feb. Investors now await key US inflation data, including the CPI and PCE, due later this week, for fresh cues on the Fed's policy outlook. Latest IMF data shows that Bank Negara Malaysia increased its gold reserves by a further 2t in Feb. This brings YTD net purchases to 5t, and lifts gold holdings now total 44t. The National Bank of Poland increased its gold reserves by 20t in Feb, per IMF data. This means its gold holdings now total 570t, around 32% of its total reserves. LME in 3-pronged consultation considering 1) reform of warehouse rent and load‑out rules, including the possibility of replacing the current 80‑day rent cap system with a fixed daily load‑out requirement for metal available to the market. 2) Assessing “evergreen” rent‑sharing arrangements, which currently allow legacy owners to receive rent shares, and deciding whether these should be phased out. 3) Re‑evaluating storage conditions, such as whether all aluminium should still be stored indoors, and where warehouses should be located to better serve metal consumption centres i.e. closer to major industrial hubs or ports, where metal is actually consumed. Base metals are trading higher as risk sentiment improves across global markets. The complex remains highly macro-driven, with copper trading in line with gold and US equity futures while moving inversely to oil. Aluminium and zinc have been the most directly exposed to the Middle East conflict, reflecting both energy-intensive production and emerging supply disruptions in the region. Nickel prices found some support after four Indonesian plants halted output following a deadly landslide. Iron ore prices were supported by China’s pledge to support the steel sector by curbing excess capacity. Economic planners at the National People’s Congress signalled plans for orderly cuts to steel output capacity, a move that could lift steel prices and improve profit margins. This, in turn, may strengthen demand for steelmaking raw materials such as iron ore.