Daily metals

Global equities were buoyed by hopes of de-escalation in the Middle East after more than a month of conflict. The announcement of the US-Iran two-week ceasefire agreement sparked a global rally, even as tensions remain on the Israel-Lebanon front. Markets remain entirely headline-driven, with uncertainty around Kharg Island and Hormuz flows keeping volatility elevated. Energy markets fell on reports of ceasefire talks in the Middle East conflict. The increased risk appetite pushed precious and industrial metals higher. Yields on 10-year US Treasuries fell by 2bp to 4.28%, while the USD index was 0.9% weaker at 98.9. Precious metals rallied on a weaker USD and a decline in bond yields but closed off the earlier highs. Gold and silver found support in expectations that easing inflation pressures could reopen the path for rate cuts. Hefty outflows of $12bn in Mar, the largest monthly outflow on record, halved global inflows into physically backed gold ETFs in Q1. Prior to Mar, global gold ETFs were on track for their strongest quarter on record; nevertheless, the volatile start to the year still marked a seventh consecutive quarter of net inflows. The Bank of Guatemala added 2t to its gold reserves in Mar, 19% higher m/m and its first addition since Sep (6t). Its gold reserves now total 16t. IMF data shows that the National Bank of Poland increased its gold reserves by 11t in Mar. This lifts its YTD net purchases to 31t, and total gold holdings to 582t. Central Bank of Uzbekistan data showed its gold reserves rose by 9t in Mar - the 6th consecutive month of buying. Net purchases over Q1 totalled 25t, lifting overall gold holdings to 416t. Base metals rallied on ceasefire hopes and a broad relief rally across risk assets, with lower energy prices helping to alleviate recession concerns and improve the demand outlook, but lack conviction, with upside dependent on a clearer macro or geopolitical trigger. With expectations building for a weaker USD and potential stabilisation in global growth dynamics, the complex is well-positioned for upside once a clear catalyst emerges, although for now, price action remains constrained. First Quantum says govt of Panama has formally approved the removal, processing and export of stockpiled copper ore at Cobre Panamá that was extracted prior to the suspension of operations. The total stockpile is estimated to contain about 70kt of recoverable copper.