Daily metals

Global equities fell further as escalating tension in the Middle East magnified concerns of a global energy shock. President Trump escalated threats against Iran to signal aggressive attacks incoming overnight, prompting Tehran to say they cut communication channels and dimming hopes of a deal between both countries. Energy markets pushed higher amid an escalation in the Middle East conflict. Reduced risk appetite pushed industrial metals lower. Yields on 10-year US Treasuries were steady at 4.35%, while the USD index was 0.2% weaker at 99.8. The J.P. Morgan global manufacturing PMIs weakened broadly in Mar, reflecting the drag from geopolitical uncertainty and higher commodity prices. The output PMI dropped 1.7-point to 51.4, remaining in positive territory but fully unwinding an early-year gain. Business sentiment (as measured by the future output PMI) took a similarly large step down, falling to a five-month low. Mirroring the declines in activity were jumps in the price indexes (both input and output) and supplier delivery times, a clear sign of both surging cost pressures and substantial supply chain disruptions. Precious metals consolidated as the market entered a cautious wait and see mode ahead of President Trump’s 8 pm. ET deadline. Additionally, a firmer USD exerted pressure. Data from the PBoC showed its gold reserves rose by 5t in Mar, the largest monthly increase since Feb 2025. This also extends its monthly increases to 17 consecutive months. Its gold holdings now total 2,313t. National Bank of Kazakhstan data showed its gold reserves rose by almost 8t in Feb. This lifted its gold reserves to 348t - the highest level of since Jan 2023. Base metals edged down on risk aversion. Aluminium was supported by news EGA’s 1.6Mtpy smelter after damage last weekend, may take a year to get back to capacity. Alumina refinery (2.4Mtpy, supplies 46% EGA needs) could maybe restart earlier. Delay to another major copper mine project: Barrick says review of Pakistan's Reko Diq to continue until mid-2027 "to comprehensively assess the security situation, capital requirements, project financing, project scope, & timeline." It has already slowed development activity. LME average daily volume in Q1 was up +25.7% YoY, and was its highest ever quarter, +13% on the prior set record in Q425. Jan and Mar saw the two highest-ever monthly LME volumes while Q1 saw three of the exchange's top five most busy days ever in terms of volume. Iron ore prices eased from the recent highs. China’s steel production fell to 160Mt in Jan-Feb, falling by 3.6% YoY, which dampened sentiment.