Our gauge of commodity demand continues to weaken amid a precarious global macro landscape, TD Securities analysts note.

Base metal complex shifts lower

“Our return decomposition framework across the complex confirms the demand side is finally starting to weigh heavy on base metals as the early summer euphoria fades.”

“Inflows into broad commodity ETFs throughout May had lifted the complex, but an easing of inflows and modest outflows have also started to weigh on the base metal complex. In this sense, AUM for base metal specific ETFs have also notably declined.”

“For Copper, our return decomposition framework is also showing a major drag from idiosyncratic factors, such as positioning, which suggests that the Red Metal could still be prone to additional downside in the near-term as bloated positions are cut.”