Inflation in the US and Deficit in China: What Is Happening in the Metals Market

In Tashkent, Uzbekistan, by November 11, a review of the metals market noted the influence of the US macroeconomy. October inflation in the US rose by 0.4% month-on-month, against the expected 0.3%, after which the dollar strengthened and bond yields increased. The market has almost fully priced in a Federal Reserve rate hike in December; a 50-basis-point increase is also being discussed.

Gold traded at $4,040 per ounce after falling nearly 3% the previous day, while silver held at $52. A strong dollar and high bond yields reduce the attractiveness of non-interest-bearing assets. Geopolitical risks are not yet offsetting the impact of US monetary policy.

Platinum rose to $1,560 per ounce, and palladium to $1,035, but it is too early to speak of a trend reversal. For platinum, a surplus of around 265,000 ounces is forecast for 2026 due to a decline in investment demand. Meanwhile, inventories remain low after three years of deficit, and industrial consumption is growing. Palladium depends on the automotive sector, where the spread of electric vehicles limits demand.

Copper holds around $6.28 per pound. Stocks on the Shanghai Exchange fell by more than 24% over the week, reaching a nearly three-year low, while the import premium hit a record $230 per ton. This partially offsets macroeconomic pressure. Aluminum dropped to $3,000 per ton on expectations of increased supplies from China, Indonesia, and Middle Eastern producers. Meanwhile, inventories in LME warehouses are approximately 55% below the levels at the beginning of the year. Zinc holds around $3,745 per ton due to limited concentrate availability and low exchange stocks, although weak industrial demand restrains its growth.