Metals Daily

This MorningLead gained around 1.5% on this Friday morning, the first of Augsut. Aluminium and copper both went up by more than 0.5% so far. But nickel and tin both remained pretty much unchanged overnight. Only zinc lost a bit. What's Moving Markets?Global equities drifted lower after President Trump’s extension of a 25% tariff on Mexican imports, along with looming deadlines for broader trade actions, added to market jitters. Meanwhile, the Fed’s preferred inflation gauge, the core PCE, rose 0.3% in Jun and 2.8% YoY, reinforcing uncertainty over a potential Sep rate cut. US copper sinks as Trump excludes refined metal from tariffs. Oil gained as India was threatened with penalties for purchasing Russian oil. Yields on 10-year US Treasuries fell by 2bp to 4.36%, while the USD index was steady at 100.WGC Gold Demand Trends report for Q225: Q2’s data reveals that total quarterly gold demand (including OTC) reached 1,249t, a 3% increase YoY. Driven primarily by investment demand, with global gold ETF inflows of 170t over the quarter, this data highlights gold’s critical role in mitigating market volatility and its sustained appeal as a strategic asset. Additional key findings show that central banks continued to buy, although at a slower pace. Regionally, China saw significant growth in bar and coin demand, contributing to the highest H1 global bar and coin demand level for 12 years. Supply was up as well, but interestingly recycling has been relatively muted given the strong price trend as people, especially in India, are increasingly choosing to use gold as collateral instead of selling it.Precious metals edged lower, but gold hovered close to the $3,300 level amid the outlook of a hawkish Fed and softer demand for safe-havens. The more industrial of the complex – silver and the PGMs were undermined by the slump in copper. Both core and headline PCE prices were above expectations in Jun to sustain concerns of stubborn inflation in key sectors of the US economy, while lower-than-expected unemployment claims consolidated the view of a healthy labour market. Consequently, rate futures swung to reflect bets that the Fed will hold rates unchanged in Sep. WGC reported total Q2 gold demand rose 3% YoY to 1,249t, while +45% YoY in value terms to $132bn. ETF inflows surged on geopolitical risk and price gains, and bar & coin demand was the highest H1 since 2013. Central banks added, while jewellery demand fell. Data published by the Monetary Authority of Singapore showed its gold reserves fell by nearly 6t in Jun. This means it sold a total of 16t over the first half of the year, with total gold reserves dropping to 204t.Base metals closed lower unsettled by the plunge in NY copper – down more than 20% after Trump’s proclamation, setting the biggest intraday drop since at least 1988 - after refined copper was exempted from tariffs and erasing the previous high premium over LME prices. Over 250kt of refined copper (highest level since 2004) is currently sitting in Comex warehouses in the US, with most of this being built after reports that Trump was looking to levy US copper imports. With the announcement that the 50% tariff will only apply to semi-processed copper products, there is a risk that US inventories will now be re-exported onto the international market if price differentials attract it.Iron ore edged lower after a policy readout from a Chinese leadership meeting underwhelmed investors. China vowed to implement forceful macroeconomic policies to shore up the economy at its latest Politburo meeting. This included a more proactive fiscal agenda and moderately loose monetary policies. However, the readout didn’t provide any details of large-scale stimulus measures.