The US dollar index fell 0.26% overnight to 99.42, posting its second consecutive monthly decline with the August monthly line down 0.36%, according to Shanghai Metals Market (SMM) reporting on September 1, 2026. Domestic base metals in China's Shanghai Futures Exchange broadly rose overnight. SHFE copper gained 0.62%, SHFE aluminum rose 0.23%, and SHFE zinc climbed 2.23%, representing the strongest performer among base metals.
SHFE tin added 0.75%, while SHFE lead fell 1.17% and SHFE nickel slipped 0.72%. In related contracts, the most-traded alumina futures contract fell 0.22%, and the most-traded cast aluminum contract edged down 0.04%. Precious metals declined overnight.
COMEX gold fell 0.72% and COMEX silver dropped 0.86%. On the Shanghai exchange, the most-traded SHFE gold contract fell 1.88%, while the most-traded SHFE silver contract dropped 2.74%. Ferrous metals all declined overnight.
Stainless steel dropped 1.15%, with iron ore and rebar both declining 0.83%, and hot-rolled coil losing 0.85%. In coking coal and coke, the most-traded coking coal contract fell 1.39%, and the most-traded coke contract dropped 1.59%. On the macroeconomic front, market expectations for a US Federal Reserve rate decision in September have risen following Fed Chairman Kevin Warsh's recent remarks.
According to CME FedWatch data, the probability that the US Fed will keep rates unchanged by September stands at 34.6%, with a 65.4% probability of a cumulative 25 basis point hike. BofA Securities noted that after Warsh's speech on Friday, market expectations for a September rate hike rose to nearly 60%, though the Fed's future tightening policy may depend on upcoming August economic data. US Treasury Secretary Bessent stated that he and Fed Chairman Warsh see eye to eye on bond issues.
Bessent stressed that core inflation remains mild and traditionally the Fed does not hike rates when hit by supply shocks. He also noted that since US President Trump took office, the 10-year Treasury yield has been basically flat. Oil markets surged overnight amid geopolitical tensions.
WTI crude rose 3.49% and Brent crude advanced 2.92%, with renewed US-Iran conflict heightening market concerns over global supply disruptions. Ship tracking agency Kepler data from August 31 showed that the number of visible commercial vessels passing through the Strait of Hormuz over the past weekend had dropped to five per day due to fears of attacks. However, the actual number of ships passing through may be higher, as some vessels turned off their automatic identification systems to avoid attacks.
Bart Melek, Global Head of Commodity Strategy at TD Securities, stated that traders reduced their net crude oil open interest this week as uncertainty over the next phase of the Iran conflict persists. Melek added that the firm still expects crude oil prices to continue rising, as there are no signs that normal passage through the Strait of Hormuz will resume in the near term. The LME was closed on August 31 for the UK Summer Bank Holiday and resumed trading on September 1.
Data sources referenced include Shanghai Metals Market (SMM), CME FedWatch, Jin10 Data APP, and energy intelligence firm Rystad Energy.
Source: news.metal.com