Metals Daily

This MorningLead lost around 0.5% on this Thursday morning. Copper and nickel both dropped just a little bit. Tin remained pretty much unchanged overnight. While aluminium and zinc gained a little. What's Moving Markets?Global equities are getting a shot of relief after Trump backpedalled even further on the battles that have roiled global markets. President Donald Trump said that he does not intend to fire Fed chair Jay Powell, despite complaining about Powell’s performance over the weekend. Q1 earnings season is here. Early indications are that this quarter may look a bit like the last: good results for the period that just ended, but unpleasantly hazy guidance about what’s next, given trade war uncertainty. Markets are ever more conditioned to the President shooting from the hip and then reversing the stance like it was never a big issue. The uncertainty caused by rapid U-turns in trade policy could still slow economic growth or even trigger a recession. The IMF’s move to sharply cut forecasts for world growth suggest that, even if Trump softens his stance, some of the damage may already be done. Yields on 10-year US Treasuries were unchanged at 4.40%, while the USD index was 0.5% stronger at 98.8.The LME is drawing up plans for a so-called “green premium” on metals that are mined sustainably, following industry pressure to distinguish them from “dirty” supplies with a larger environmental impact. The exchange said that there was sufficient support among market participants to explore launching ways to buy aluminium, copper, nickel and zinc that had been mined sustainably. The exchange, said it was proposing allowing traders to buy certified green metals via Metalshub, a trading platform with which it has an existing partnership. Under the LME’s plans traders will be able to purchase green aluminium, copper, nickel and zinc for immediate delivery.Precious metals showed some divergence as the PGMs and silver that benefitted from expectations of a de-escalation in the trade war between the US and China. The sell-off in gold was triggered by several pushbacks from the US administration, ranging from Bessent seeing a de-escalation with China to Trump talking about lowering China tariffs substantially, while not sacking Fed Chair Powell and Putin open to bilateral talks with Kyiv as Ukraine delegation heads to London. Overall, gold was overbought and ripe for consolidation, which will now provide clues of underlying strength. Gold was deemed the most crowded trade by fund managers surveyed by BoA earlier this month. In the past 20 years, when gold got too stretched (in both directions) relative to its 200-day moving average, a correction normally followed. Yesterday's blowout top saw the spot price trade more than 20% above the 200-dma, and if history is being repeated, gold may now need a prolonged period of consolidation in order for the 200-dma to catch up. Global gold ETFs added a further $3.4bn (~33t) to AUM last week. All regions saw net inflows, but Asia was the standout. YTD net inflows are now a whopping $30.6bn (~326t).Base metals were supported by China-US trade optimism and a renewed tariff-related widening of the COMEX premium over London to 15% boosted copper. The world refined copper market was in a surplus of about 150kt in Jan-Feb, based on Chinese apparent usage (excluding changes in bonded/unreported stocks). Adjusted for estimated changes in Chinese bonded stocks, the surplus grew to 167kt.Iron ore steadied just below the $100/t mark, as the prospect of economic stimulus from Beijing and a less-aggressive trade war in the US eased concerns of poor ferrous metal demand. US President Trump signalled that tariffs on China would not remain at the current levels, softening concerns that the ongoing trade war may be de-escalated.