Daily metals

Global equities fell as an increasingly strained truce between Iran and the US lifted energy prices. The US continued to strike Iranian targets near the Persian Gulf overnight, adding to scepticism over an incoming deal after the White House rejected Tehran's claim that it had a draft of a peace agreement that would restart trade through the Strait of Hormuz. The energy sector fell on reports the US and Iran are close to an interim peace deal. Base metals were broadly stable, while the precious metals sector recovered from earlier losses. Yields on 10-year US Treasuries fell by 4bp to 4.45, while the USD index was 0.2% weaker at 99. Precious metals gained as markets weighed hopes of progress in Middle East peace talks against persistent inflation worries. According to Axios, US and Iranian negotiators have reached a 60-day memorandum of understanding to extend a ceasefire and begin talks on Iran’s nuclear program, though final approval from President Trump is still pending. Tensions remain elevated, with continued exchanges between the US and Iran, while Israel has also resumed strikes on Hezbollah targets in Lebanon despite a fragile ceasefire. At the same time, gold remains close to a two-month low as higher energy prices fuel inflation concerns and reduce expectations for near-term rate cuts. Fed officials maintained a cautious tone, with Lisa Cook backing steady rates for now but leaving room for hikes if inflation accelerates, while John Williams warned inflation could rise toward 4% headline and 3% core in the near term. From a technical perspective, a sustained break below the 200-day moving average - currently at $4,395 and breached today for the first time since 2023 - raises the risk of a retest of the Mar low near $4,100. Base metals ended little changed. Aluminium gyrated alongside oil as markets priced out part of the geopolitical risk premium embedded across conflict-sensitive assets. Copper also continued to trade largely on macro-driven flows, maintaining its correlation with precious metals. Copper's ability to hold the $13,600/t floor intact suggests the market remains resilient, with limited appetite to press the downside aggressively. COMEX copper is once again trading at a rising premium to London, echoing last year’s dislocation, as traders continue shipping metal to the US amid renewed speculation about future import tariffs. The resulting surge in COMEX inventories to a fresh record has tightened availability elsewhere, thereby helping underpin prices for a metal already in strong demand from the global energy transition. Attention now turns to the 30 Jun deadline for the US Commerce Secretary to deliver an update on the domestic copper market, a review that could pave the way for import duties from Jan 2027. Iron ore prices are steady around $110 as a seasonal slowdown in steel demand pressured feedstock prices.