Base metals experienced a notable rise on July 3,with significant gains across various markets. The Shanghai Futures Exchange (SHFE) reported increases in copper,aluminum,lead, and nickel, while tin also climbed. Specifically,SHFE copper saw a 0.76% uptick,and aluminum rose by 1.45%. In contrast, SHFE zinc edged down slightly by 0.02%.
On the London Metal Exchange (LME),the upward trend continued . LME tin surged by 2.05%, while copper and aluminum recorded gains of 0.96% and 1.04%,respectively. LME lead advanced by 0.8%, and nickel rose by 1.1%. This broad-based increase in base metals reflects a robust demand in the market.
In precious metals sector,COMEX gold rose by 1.64%,and silver gained 2.76%. SHFE also noted significant increases,with gold climbing 2.67% and silver futures surging by 4.05%. Analysts at OCBC Bank Group Research indicated that while gold remains a target for asset diversification,its price could face downward pressure due to a challenging macroeconomic environment .
Despite the positive momentum in metals,ferrous metals faced declines . Iron ore dropped by 1.41%, and hot-rolled coil, rebar,and stainless steel all fell within 0.4%. In coking coal market, however, the most-traded contracts rose,with coking coal increasing by 1.58% and coke by 1.89%.
In domestic market,SHFE's lithium carbonate futures rose by 1.87%, while silicon metal futures gained 0.18%. The average price for #1 copper cathode in Guangdong reached 102,965 yuan per metric ton,up 625 yuan from the previous trading day . This reflects a tightening inventory situation in the region .
On the macroeconomic front,the People's Bank of China (PBOC) reported a net drain of 168.5 billion yuan due to open market operations. This week,the central bank conducted 678.5 billion yuan of 7-day reverse repos, indicating tightening liquidity environment.
Meanwhile,the US dollar index saw a slight decline of 0.07% to 100.81. A weaker-than-expected June payrolls report has led to diminished expectations for near-term interest rate hikes by US Federal Reserve. The market is now pricing in a 52% chance of a rate hike at the September meeting, down from 64% previous day .
As the market digests these developments,analysts remain cautious. recent employment data suggests cooling labor market, providing the Fed with room to maintain its current policy stance. The outlook for the US dollar remains constructive,particularly against low-yielding currencies,as traders adjust their expectations for future rate movements.
