SHANGHAI, Oct. 18 (SMM) – The US President Barack Obama overnight signed into law a bill to end a 16-day government shutdown and head off a debt default. In response, LME lead prices initially reached USD 2,174/mt after starting at USD 2,166/mt and later dipped to USD 2,143.5/mt, down over 1% in Asian trading hours. During the European and US trading session, the US dollar index was down over 0.8 to drop below 80 as it was rumored that Fitch Ratings would follow to cut the US credit rating after China’s Dagong Global Credit Rating Company cut its rating. As a result, ,LME lead prices pared earlier losses and hit a recent new high of USD 2,177/mt. Finally, LME lead ended the day at USD 2,171.5/mt, up USD 2.5/mt. Trading volumes shed by 367 lots to 5,999 lots, while positions decreased by 1,022 lots to 120,105 lots, and LME lead inventories were flat at 233,025 mt, a sign of strong risk aversion sentiment among investors.
The US dollar index tumbled by over 1% to end at 79.6, while the COMEX silver contract for December delivery surged by USD 0.515/oz to USD 21.88/oz.
Markets will eye China’s Q3 GDP which is forecast to be 7.8%, higher than Q2’s 7.5% and is expected to give a boost to base metals prices on Friday. However, risk aversion sentiment will still prevail on the markets. LME lead prices are expected to move in USD 2,160-2,190/mt range, while the most active SHFE lead prices will possibly fluctuate between RMB 14,250-14,350/mt on Friday. In China’s spot market, traded prices will be flat at RMB 14,100-14,200/mt.