LEAD TODAY – Prices set new highs for the year

Short Term:
Medium Term:
Long Term:
R1 2069 20 DMA
R2 2157 Sept high
R3 2162 May’15 high
R4 2307 HRL – July’14 high
R5 2499 Jan’13 high
S1 2069 20 DMA
S2 1966.50 Recent low
S3 1955 UTL
S4 1954 38.2% Fibo
S5 1916 July high
S6 1895 March high
S7 1783
S8 1683.50 Brexit-low
S9 1551.50 Nov 2015 low
S10 1535 June 2010 low

MACD = moving average convergence divergence

HSL = horizontal support line

Fibo = Fibonacci retracement level

RL = Resistance line

H&S = Head and shoulder pattern


  • Lead prices are pushing higher again and have overcome the September high.
  • Having raced higher in September, three-month prices stalled and fell back to $1,966 per tonne but this was well above the previous dip low and also above the 38.2% Fibo of the May-September rally. 
  • The ‘two steps up, one-step down’ pattern suggests a robust upward trend.
  • The stochastics are bullish again.

Macro factors

We continue to like lead’s fundamentals, as we have all year. The fact prices have not held down for long highlights bullish sentiment.

Better PMI data of late and robust US, Chinese and EU vehicle sales also bode well for metal demand.

At face value, the combination of an apparent supply surplus and stable-but-higher LME stocks provides little reason to be bullish in the short term. So prices should probably remain capped on the upside until there are more signs of a deficit emerging. But with the other metals extending gains, it is not surprsing that lead is following, especially because we expect a deficit to materialise before long. We would get more comfortable if LME stocks started to fall. 

The c-3s spread is not particularly strong at a contango of $13-12.5 per tonne – this does not suggest short-covering. But forward lending suggests forward buying. The 3-15 month spread has averaged $26 per tonne contango so far in November, basis evening evaluations, compared with averages of $23c per tonne in October and $16c per tonne in September.  


Lead’s latest rebound is working higher. The break above $2,157 per tonne, the highest since September, and $2,162 per tonne, the highest since May 2015, now targets the lower of the two HRLs on the monthly chart at $2,307 per tonne.

All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.