Low metal prices attract some buying interest, especially in the oversold ones

Otmane El Rhazi from The Bullion Desk.

Many of the base metals spiked lower on Tuesday; at the day’s lows prices were down an average of 3.9 percent, skewed by an 8.5 percent drop in nickel and a 6.9 percent drop in tin. The sell-offs turned into spikes with the complex closing down an average of 0.6 percent, with nickel closing the day up 1.8 percent, while tin closed off 3.3 percent. We thought the SHFE’s decision to make Norilsk nickel brands good for delivery for against SHFE nickel contracts was going to be bullish for LME nickel, while bearish for SHFE prices, it seems the sell-off in SHFE yesterday dragged LME nickel down too, before reality set in.

Precious metals had a volatile day – at the day’s lows they were down 0.9 percent on average, with silver off 1.7 percent at one stage, while they ended the day mixed with palladium up 0.9 percent, while gold, silver and platinum prices closed down 0.5 percent, with gold at $1,173.50.

This morning the base metals are generally little changed with nickel the exception as is off 0.5 percent having rebounded strongly yesterday, the rest of the complex are either side of unchanged with copper at $5,764.50 and volume has reverted back to low levels with 2,408 lots traded as of 06.07 BST.

Chinese PMI data already out shows a slight deterioration from the flash readings, with the official reading unchanged at 50.2, but that was below an expected 50.5, while the HSBC reading was 49.4 after a flash reading of 49.6 – it was up from 49.2 in May. Japan’s tankan data was stronger and its manufacturing PMI improved to 50.1, from a flash reading of 49.9.

The precious metals prices are stronger tis morning, led by palladium that is up 4.1 percent to $698.80, platinum is up 0.9 percent, gold and silver bullion prices are up an average of 0.2 percent with the gold price last at $1,174.10.

In Shanghai, tin and nickel are rebounding after yesterday’s weakness, they are up around 0.9 percent, but the rest of the complex are lower by an average of 0.6 percent with copper down 0.4 percent at Rmb 42,060. Spot copper in Changjiang is also off 0.4 percent at Rmb 42,500-42,650, the backwardation with the futures has extended to an equivalent of $95 per tonne and the LME/Shanghai copper arb ratio is 1 to 7.35 for July.

Gold and silver in China are mixed with gold off 0.3 percent, while silver is up 0.3 percent.

Equities – remain mixed on the back of uncertainty over Greece with the Euro Stoxx 50 off 1.3 percent, but the Dow was up 0.1 percent yesterday. This morning, Asia is mixed with China’s CSI 300 down 0.6 percent after its recent volatility; the Nikkei is up 0.3 percent, the Hang Seng is closed and the Kospi is up 1.1 percent.

The dollar has been choppy in recent days, the dollar index is last at 95.59 having spiked up to 96.39 on Monday, which was then followed by a drop to 94.67. The euro is holding up remarkably well at 1.1136, but it does have a slight downward bias. Sterling is holding up well, it is at 1.5700, as is the yen at 122.60, the aussie is at 0.7711, the rouble is in low ground at 55.47, while the yuan is stronger despite recent interest rate cuts, it is last at 6.2000.

The economic agenda is busy, we have reviewed the data out of Asia above, data still to be released includes manufacturing PMI out across Europe, UK and US, Bank of England Governor Mark Carney is speaking about the Financial Stability Report and then US data includes: Challenger job cuts, ADP-non-farm employment change, construction spending, crude oil inventories and total vehicle sales – see table below for more details.

The base metals have run into underlying support and prices for the most part are getting some lift off recent weakness, especially those that spiked lower. Copper is the strongest of the complex as it has edged higher in recent days, nickel spiked lower aggressively but has since rebounded, as has zinc and tin to a lesser extent. Aluminium and lead have found some underlying buying, but not much. Overall, sentiment seems weighed down by a subdued Chinese outlook and risk reduction over uncertainty surrounding Greece. Chinese PMI data was only slightly worse than the better than expected flash data, so we wait to see if European PMI data confirms the better flash data that was out last week. If it does, then that might provide more support for industrial metals.

Gold prices are doing their best to hold above support, but the market lacks energy and remains vulnerable, the same goes for silver. Platinum is attempting to edge higher, while palladium has started to rebound from oversold conditions. All the precious metals are in low ground, the PGMs look particularly oversold, so we wait to see if there is follow through buying. 

 

Overnight Performance
BST	06:07	+/-	+/- %	Lots
Cu	5764.5	2.5	0.0%	898
Al	1689.5	-0.5	0.0%	205
Ni	11960	-55	-0.5%	732
Zn	1998	-1	-0.1%	442
Pb	1760.5	0	0.0%	83
Sn	13870	-10	-0.1%	48
Steel	300	0	0.0%	Total
	Average (BM ex-Steel)		-0.1%	2,408
Gold	1174.1	0.6	0.1%
Silver	15.71	0.04	0.3%
Platinum	1085.7	9.7	0.9%
Palladium	698.8	27.8	4.1%
	Average PM		1.3%

 

SHFE Prices 06:27 BST		Change	% Change
Cu	42060	-150	-0.4%
AL	12535	-85	-0.7%
Zn	15245	-100	-0.7%
Pb	12745	-100	-0.8%
Ni	88780	740	0.8%
Sn	107670	-930	-0.9%
Average change (base metals)			-0.4%
Rebar	2135	4	0.2%
Au	237.75	-0.6	-0.3%
Ag	3457	11	0.3%

 

Economic Agenda
BST	Country	Data	ACTUAL	Expected	Previous
12:50am	Japan	Tankan Manufacturing Index	15	12	12
12:50am	Japan	Tankan Non-Manufacturing Index	23	23	19
2:00am	China	Manufacturing PMI	50.2	50.5	50.2
2:00am	China	Non-Manufacturing PMI	53.8		53.2
2:35am	Japan	Final Manufacturing PMI	50.1	49.9	49.9
2:45am	China	HSBC Final Manufacturing PMI	49.4	49.6	49.6
8:15am	Spain	Spanish Manufacturing PMI		55.6	55.8
8:45am	Italy	Italian Manufacturing PMI		54.4	54.8
8:50am	France	French Final Manufacturing PMI		50.5	50.5
8:55am	Germany	German Final Manufacturing PMI		51.9	51.9
9:00am	EU	Final Manufacturing PMI		52.5	52.5
9:30am	UK	Manufacturing PMI		52.6	52
10:30am	UK	BOE Gov Carney Speaks
10:30am	UK	BOE Financial Stability Report
All Day	EU	Eurogroup Meetings
12:30pm	US	Challenger Job Cuts y/y			-22.5%
1:15pm	US	ADP Non-Farm Employment Change		219K	201K
2:45pm	US	Final Manufacturing PMI		53.4	53.4
3:00pm	US	ISM Manufacturing PMI		53.2	52.8
3:00pm	US	Construction Spending m/m		0.4%	2.2%
3:00pm	US	ISM Manufacturing Prices		51.1	49.5
3:30pm	US	Crude Oil Inventories		-1.9M	-4.9M
All Day	US	Total Vehicle Sales		17.2M	17.8M

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Gold inches up, Greece defaults on IMF payment

Otmane El Rhazi from The Bullion Desk.

Gold edged up slightly in the Asian trading hours on Wednesday after Greece missed a loan payment to the International Monetary Fund (IMF).

The spot gold price was last at $1,174.2/1,175.0 per ounce, up $0.7 on Tuesday’s close. Trade has ranged from $1,172.9 to $1,175.2 so far. In yesterday’s session gold hit its lowest in three weeks at $1,167.00.

As expected, Greece has failed to pay their 1.6 billion euros due to the IMF overnight.  The Greek Prime Minister Alexis Tsipras made a request for a two-year bailout plan, which was rejected by the country’s creditors after an exceptional Eurogroup conference call last night. The Eurogroup plans to hold another conference call this afternoon to discuss the plan.

Still, latest developments in Greece don’t seem to be impacting gold in any meaningful way, UBS noted.

“There is an element of headline fatigue – in a sense, the threshold for bad news is higher and it will probably take a lot more to trigger a significant wave of gold safe haven buying,” it said.

“Unless there is a rapid deterioration in the situation in Greece in the coming days and weeks, it’s difficult to see gold having a more notable reaction.”

In US data overnight, the S&P/CS Composite-20 HPI rose 4.9 percent, just below forecasts of 5.3 percent, as was the Chicago PMI at 49.4. But the CB consumer confidence figure came in much better than expected at 101.4.

Today is another busy day for data that includes PMI data releases from the eurozone and the US.

Already out, China’s HSBC final manufacturing PMI for June at 49.4 was below expectations of 49.6 but above the 49.2 recorded in May. The official manufacturing PMI stood at 50.2 in June, unchanged from the previous month’s reading, while the non-manufacturing index for June rose to 53.8 from May’s 53.2.

The main data event of the week is Thursday’s US unemployment report – the country is expected to have created 231,000 jobs this month, down from 271,000 in May.

As for the other precious metals, silver was little changed at $15.69/15.74. Platinum at $1,083/1,088 was up $7 and palladium at $685/690 increased $14.

On the Shanghai Futures Exchange (SHFE) gold for December delivery was one yuan lower at 237 yuan per gram.

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Gold failing to attract safe-haven flows despite Greek furore

Otmane El Rhazi from The Bullion Desk.

Gold is failing to make anything of its supposed safe-haven qualities despite Greece’s grip on eurozone membership now at its weakest.

Assuming an unlikely last-minute deal with its international creditors is not reached, Greece’s 7.2-billion-euro bailout programme will end, leaving the country with huge debts and few allies.

The country appears set to miss tonight’s deadline for a 1.6-billion-euro payment to the International Monetary Fund, putting it on track for a potentially messy ‘Grexit’.

But despite the uncertainty and heavy pressure on global equity markets, gold has confounded widely held assumptions that it would rise in a flight to safety – it has fallen more than one percent this week, nearly two percent in June and significantly from its May peak of $1,232.50 per ounce.

This suggests that investors either do not value gold’s credentials as a safe haven or do not yet regard this situation as a crisis yet.

“The euro is effectively unchanged – despite the seemingly high likelihood of a Greek default on the IMF payment and gold is only at the bottom of the same range that it has been in for about a month or so,” Mitsubishi precious metals strategist Jonathan Butler told FastMarkets,

“Either the market isn’t pricing in the implications of what is happening and may well do at a later date or the crisis has already been priced in and this is about as good as it gets for gold,” he said.

Any safe-haven bids on gold are likely to prove fleeting outside of a significant escalation of the situation, he added.

The lack of activity in the gold market is evidence that it expects Greece to remain part of the eurozone, Commerzbank’s Carsten Fritsch said. But Marex Spectron’s David Govett disagreed.

“Attempting to link Greece to gold is a serious waste of time. Gold is not a safe haven and proved that once again on Monday,” he said.

“The Greeks can carry on attempting to self-destruct along with the help of the EU and the IMF, but at the end of the day, gold will not be the product to turn to in attempting to guard against European chaos,” he added.

Recent fluctuations in the gold price have predominantly dovetailed with movements in equities. When optimism that a deal could be reached last week peaked, there were large inflows into equity markets, particularly those in Europe. At the same time, gold stepped further from $1,200 while investors embraced risk.

As well, the euro is on course for its best quarterly rise in more than four years, rising over four percent against the dollar despite months of uncertainty over Greece. Historically, gold has an inverse relationship to the dollar; steadiness in the greenback has been replaced in gold in recent months.

On the other hand, investor interest in gold is improving even if this has not yet translated into higher prices. Speculative long positions on Comex in gold have risen, suggesting that sentiment is turning more bullish in the futures market, perhaps driven by the drama in Greece.

The net long fund position in gold jumped 26 percent or 19,391 contracts to 95,114 in the week to June 23 via long accumulation of 11,891 contracts and a drop of 7,500 in short positions.

Interest in gold-backed exchange-traded funds is also growing. In the ETFs monitored by FastMarkets, holdings rose 7.23 tonnes to 1,600.26 tonnes on June 25, the largest daily rise in more than five months, which coincided with heightened uncertainty over Greece.

And while holdings have since dipped back below 1,600 tonnes, fresh inflows are possible – not least of all if, in the event of a Grexit, the Greek people might seek to protect their wealth in a liquid, convertible and portable asset such as gold.

(Editing by Mark Shaw)

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Gold price slips, investors left shaken by Greek turmoil

Otmane El Rhazi from The Bullion Desk.

Gold prices reversed Monday’s slight gains on Tuesday in the US on the deadline day for Greece reaching a deal with its creditors before its bailout runs out.

Gold for August delivery on the Comex division of the New York Mercantile Exchange fell $7.70 or 0.7 percent to $1,171.30 per ounce. Trade has ranged from $1,168.90 to $1,180.0.

After pulling out of talks with creditors over the weekend, he Greek government said yesterday it will not repay the latest tranche of 1.6 billion euros of monies owed to the International Monetary Fund (IMF) today.

Instead, Athens announced a referendum for June 5, allowing Greek citizens to vote on their future. Prime Minister Alexis Tsipras made a television appeal on Monday to urge Greeks to vote against the austerity measures proposed by its creditors that it has been campaigning against for the last five months.

But confusion reigns – reports of new proposals from some quarters have been rebuffed in others, Spanish Prime Minister Mariano Rajoy has said that a ‘no’ vote in Sunday’s referendum must trigger a Grexit while German finance minister Wolfgang Schäuble said the opposite and rumours of the resurrection of the drachma have been denied.

Tsipras may even be ready to meet with senior eurozone officials later today to sign off on a revised deal even before the weekend vote.

Still, gold has not seen a direct benefit from the chaos although it is typically seen as a safe haven for investors at times of geopolitical strife.

“We remain surprised that gold is not being taken up as a safe haven but it does seem to still be supported in the $1,160-1,170 area,” FastMarkets analyst William Adams said.

In wider markets, Germany’s DAX and France’s CAC-40 were each up 0.1 percent, while the euro was 0.2 percent softer at 1.1216 against the dollar, up almost a cent on earlier lows.

In data today, German retail sales bettered expectations at 0.5 percent, while French consumer spending dropped short at 0.1 percent. The Italian monthly unemployment rate was better than expected at 12.4 percent, while the German unemployment change at -1,000 undershot.

The aggregated eurozone CPI at 0.2 percent was as expected, as were the core figure at 0.8 percent and the unemployment rate at 11.1 percent. The CB consumer confidence number, the Chicago PMI and the S&P/CS Composite-20 HPI are due from the US later.

In the other precious metals, Comex silver for July delivery was down 8.9 cents at $15.575 per ounce. Trade has ranged from $15.530 to $15.725.

Platinum futures for July delivery on the Nymex fell $2.40 at $1,079.00 per ounce, while the most-actively traded palladium contract was at $672.25, up $5.80.

(Editing by Mark Shaw)

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Gold price lower, market dismisses safe-haven qualities

Otmane El Rhazi from The Bullion Desk.

The gold price drifted further in early trading on Tuesday, failing to benefit from its supposed safe-haven qualities while Greece staggers towards an exit from the eurozone.

Spot gold was last at $1,176.90/1,177.60 per ounce, down $2.80 on Tuesday’s close and having traded in an intraday range of $7 so far.

Assuming an unlikely last-minute deal is not reached, Greece’s 7.2-billion-euro bailout programme with international creditors will end, leaving the country with huge debts and few allies.

The country appears to be set to miss the 1.6-billion-euro payment owed to the International Monetary Fund, putting it on track for a potentially messy ‘Grexit’.

The Greek people are set to go to the polls on Sunday to vote for or against the latest proposals from its creditors. Prime Minister Tsipras made a television appeal on Monday to urge Greeks to vote against the austerity measures that it has been campaigning against for the last five months.

But despite the uncertainty and heavy pressure on the world equity markets, gold is down more than one percent for the week, nearly two percent in June and down significantly from the May peak of $1,232.50.

“We remain surprised that gold is not being taken up as a safe haven but it does seem to still be supported in the $1,160-1,170 area,” FastMarkets analyst William Adams said.

The metal’s lack of volatility is a sign that the market expects Greece to stay in the bloc, Commerzbank suggested. But Marex Spectron’s David Govett disagreed.

“I have said it before and I have no doubt I will say it again, but attempting to link Greece to gold is a serious waste of time. Gold is not a safe haven and proved that once again yesterday,” he said.

“The Greeks can carry on attempting to self-destruct along with the help of the EU and the IMF, but at the end of the day, gold will not be the product to turn to in attempting to guard against European chaos,” he added.

The euro is weaker this morning at 1.1164 against the dollar, down around 0.5 percent, while European stock indices have also opened slightly lower. The Dax was last down around one percent, as was the Cac-40 while the Euro Stoxx was 0.83 percent lower. Earlier, Asian markets closed just in positive territory, having swung considerably over the past couple of sessions.

In data today, German retail sales bettered expectations at 0.5 percent, while French consumer spending dropped short at 0.1 percent. The Italian monthly unemployment rate was better than expected at 12.4 percent, while the German unemployment change at -1,000 undershot.

The aggregated eurozone CPI at 0.2 percent was as expected, as were the core figure at 0.8 percent and the unemployment rate at 11.1 percent.

The CB consumer confidence number, the Chicago PMI and the S&P/CS Composite-20 HPI are die from the US later.

In the other metals, silver was last down five cents at $15.68/15.73 per ounce, palladium was up $7 at $670/675 and platinum was unchanged at $1,179/1,084.

(Editing by Mark Shaw)

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Gold prices consolidate after Monday’s knee-jerk reaction

Otmane El Rhazi from The Bullion Desk.

Gold prices gapped higher yesterday on the Greek news, but then gave back most of the gains and the other precious metals followed suit. At the day’s highs prices were up an average of 1.2 percent, they closed off 0.3 percent with gold up 0.2 percent at $1,178.70.

The Greek referendum call weighed on base metals prices yesterday that is with the exception of copper that put in a relatively strong performance. At the day’s lows prices were off an average of 2.4 percent, which was skewed by a 5.7 percent drop in nickel and 3.8 percent drop in tin – two of the less liquid markets, but excluding those two, prices were off an average of 1.2 percent at the lows. Nickel fell as Norilsk nickel was accepted as good delivery against Shanghai Futures Exchange nickel contracts, which reduces the risk of a short-squeeze in SHFE nickel prices. The base metals, with the exception of nickel and tin, closed mixed with lead up 0.3 percent, copper up 0.1 percent, while zinc was off 0.2 percent and aluminium off 0.4 percent.

This morning the metals again under pressure, the exception again being copper that is up 0.1 percent at $5,805, while the rest are weaker with aluminium off 0.7 percent, lead off 0.6 percent, zinc down 0.4 percent, tin off 0.1 percent and nickel spiralling lower with a 4.1 percent drop to $11,320. Nickel at one stage was off 8.5 percent at $10,795. Volume is above average with 6,742 lots traded, of which 3,254 lots have been nickel and 2,091 lots have been copper – see table below for more details.

Gold prices are off 0.3 percent this morning at $1,176.70, silver is off 0.5 percent, platinum is off 0.4 percent and palladium is down 0.1 percent. The fact gold is struggling given the deterioration in the Greece situations beggars belief, but the fact it is may be telling us that other markets are over reacting.

The base metals in Shanghai, are down an average of 2.1 percent led by a five percent fall in nickel and four percent fall in tin, aluminium, lead and zinc are off an average of 1.2 percent and copper is bucking the trend with a 0.2 percent gain to Rmb 42,260. Spot copper in Changjiang is up 0.1 percent at Rmb 42,650-42,800, the backwardation is wider at an equivalent of $86 per tonne and the LME/Shanghai copper arb ratio is at 1 to 7.33, basis July.

Precious metals in Shanghai are weaker, gold by just 0.1 percent, while silver is off 1.5 percent.

Equities were under pressure yesterday following the Greek development with the Euro Stox50 closing down 4.2 percent and the Dow closed down two percent. In Asia, China has had a wild day so far with CSI 300 dropping a further 4.2 percent, before rebounding to being up 5 percent and is last up 4.4 percent. The Nikkei is up 0.6 percent, the Hang Seng is up 1.5 percent and the Kospi is up 0.5 percent. So for now Asia seems to be containing the fallout from Greece, we wait to see if Europe can follow suit.

Currencies – the dollar index has given back Monday’s gains, it is last at 95.14 and the euro is back at 1.1192 after spiking down to 1.0967 yesterday. Sterling is treading water at 1.5724, the yen is holding on to its safe-haven premium, it is last at 122.30, the aussie is at 0.7675, the rouble is weaker at 55.57 and the yuan is at 6.2085.

So currencies and equities are seeing plenty of gyrations, but are not overly directional, other than for China’s CSI which was correcting before Greece called the referendum. This suggests that Greece’s grabbing the initiative by calling the referendum spooked the markets as it was unexpected, but the feeling is the fallout in the end will be limited – this would explain gold’s performance even though it suggests massive complacency that the ‘can will be kicked down the road’.

The economic agenda is busy with the deadline for Greece to repay the IMF and with a host of European data including: German retail sales, German, Italian and EU unemployment data, French consumer spending, UK final GDP, index of services, business investment and EU and Italian CPI. US data includes Chicago PMI, Composite HPI and consumer confidence – see table below.

The base metals are polarised with nickel dropping like a stone, but this morning’s 8.5 percent drop is now being reversed and given the volume traded it looks as though the extent of the dip was exaggerated by the thinness of the market at that time of day. Copper on the other hand is looking stronger with prices above $5,800. There is some talk of fund shorts in China taking profits to help pay margin calls against equities – but we would also note that copper inventories on SHFE have also been falling which has given copper something of a positive spin. The rest of the metals seemed to have spiked lower yesterday and are now attempting to recover. Basis the theme mentioned above it does look as though the markets suffered a knee-jerk reaction yesterday and are now unwinding that.

Gold prices gapped higher yesterday, prices are now higher than they were on Friday but well below yesterday’s highs, platinum and silver are consolidating in low ground while palladium remains in freefall with a fresh low of $664 seen this morning. We remain surprised that gold is not being taken up as a safe-haven, but it does seem to still be supported in the $1,160-1,170 area.

 

Overnight Performance
BST	06:11	+/-	+/- %	Lots
Cu	5805	7.5	0.1%	2091
Al	1688.5	-12.5	-0.7%	540
Ni	11320	-480	-4.1%	3254
Zn	2012	-10	-0.5%	714
Pb	1775	-11	-0.6%	122
Sn	14350	-10	-0.1%	21
Steel	300	0	0.0%	Total
	Average (BM ex-Steel)		-1.0%	6,742
Gold	1176.7	-3.3	-0.3%
Silver	15.67	-0.08	-0.5%
Platinum	1077	-4	-0.4%
Palladium	664.5	-0.5	-0.1%
	Average PM		-0.3%

 

SHFE Prices 06:21 BST		Change	% Change
Cu	42260	80	0.2%
AL	12570	-160	-1.3%
Zn	15335	-170	-1.1%
Pb	12825	-175	-1.3%
Ni	87330	-4600	-5.0%
Sn	107450	-4420	-4.0%
Average change (base metals)			-2.1%
Rebar	2111	-95	-4.3%
Au	238.15	-0.2	-0.1%
Ag	3421	-51	-1.5%

 

Economic Agenda
BST	Country	Data	ACTUAL	Expected	Previous
2:30am	Japan	Average Cash Earnings y/y	0.6%	0.7%	0.7%
6:00am	Japan	Housing Starts y/y	5.8%	6.2%	0.4%
7:00am	Germany	German Retail Sales m/m		0.0%	1.7%
7:45am	France	French Consumer Spending m/m		0.3%	0.1%
8:55am	Germany	German Unemployment Change		-5K	-6K
9:00am	italy	Italian Monthly Unemployment Rate		12.5%	12.4%
9:30am	UK	Current Account		-23.7B	-25.3B
9:30am	UK	Final GDP q/q		0.4%	0.3%
9:30am	UK	Index of Services 3m/3m		0.5%	0.4%
9:30am	UK	Revised Business Investment q/q		1.8%	1.7%
10:00am	EU	CPI Flash Estimate y/y		0.2%	0.3%
10:00am	EU	Core CPI Flash Estimate y/y		0.8%	0.9%
10:00am	EU	Unemployment Rate		11.1%	11.1%
10:00am	Italy	Italian Prelim CPI m/m		0.3%	0.2%
Tentative	Italy	Italian 10-y Bond Auction			1.83|1.4
12:00pm	UK	MPC Member Haldane Speaks
2:00pm	US	S&P/CS Composite-20 HPI y/y		5.3%	5.0%
2:45pm	US	Chicago PMI		50.2	46.2
3:00pm	US	CB Consumer Confidence		97.1	95.4

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Gold price dips despite Grexit fears

Otmane El Rhazi from The Bullion Desk.

Gold was lower in the Asian trading hours on Tuesday despite Greece edging closer to a debt default, raising questions of the physical demand for the yellow metal.

The spot gold price was last at $1,176.5/1,177.4, down $3.50 on Monday’s close. Trade has ranged from $1,176.5 to $1,181 so far.

“The safe haven bid for gold has surprisingly failed to materialise, although participants should expect an official Grexit, should it happen, to provide support,” MKS said.

Greece’s future in the eurozone is hanging in the balance – Greece pulled out of emergency meetings with creditors over the weekend and called for a referendum on Sunday to vote on the proposed bailout terms.

Greek banks remain closed while the country has notified the IMF it will not be paying the 1.6-billion-euro loan instalment due today.

“Investors are simply not that interested in gold at present and physical demand is weak,” William Adams, FastMarkets head of research, said.

“It maybe that the correction in Chinese equities leads to some money moving back into physical gold but that might take some time to be felt,” he added.

Chinese equities officially entered a bear market after dropping another 3.56 percent on Monday, MKS noted.

A slew of numbers is due from the eurozone and the US today. US non-farm payroll data on Thursday – released a day early due to the July 4 holiday – will be the key data focus for markets this week.

As for the other precious metals, silver was little changed at $15.64/15.69. Platinum at $1,079/1,084 fell $2 and palladium was down $1 at $664/670.

On the Shanghai Futures Exchange (SHFE) gold for December delivery was unchanged at 238 yuan per gram.

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Gold prices buoyed by breakdown in Greek talks

Otmane El Rhazi from The Bullion Desk.

Gold prices increased as failed Greek talks have raised concerns of an impending exit from the bloc.

Gold for August delivery on the Comex division of the New York Mercantile Exchange rose $5.80 to close at $1,179.0 per ounce. Trade ranged from $1,173.20 to $1,187.60.

The Greek tragedy reached an impasse over the weekend as talks fell apart between the country and its creditors. In response to the failed negotiations, the European Central Bank (ECB) refused to increase lending rates to Greek banks – increasing the odds of a bank run.

Now the Greek people will decide their future in the bloc in a referendum. A rejection of further pension cuts could set the stage for a Greek exit from the bloc – the so-called Grexit. An unprecedented – for an advanced economy – technical default could have far-reaching consequences for national economies.

The country must make a repayment of 1.5 billion euros to the International Monetary Fund by tomorrow, with IMF managing director Christine Lagarde stating that no extensions will be provided. The country owes 9.7 billion euros to the IMF this year and 6.6 billion euros to the ECB in July and August alone.

Even with the bearish outlook for the eurozone and global equity markets, gold saw little movement upwards, raising questions of the physical demand for the yellow-metal.

“Investors are simply not that interested in gold at present and physical demand is weak.” FastMarkets head of research William Adams said. “We are surprised how weak the performance of gold has been today, given the escalation of the Greece issue.”

Elsewhere, the People’s Bank of China cut the one-year lending rate by 25 basis points to 4.85 percent – its fourth cut since November – and lowered the amount of reserves certain banks are required to hold by 50 basis points. It also cut the one-year deposit rate rate by 25 basis points to 2.0 percent.

In US equities, the Dow Jones industrial average and S&P were down 1.6 percent and 1.7 percent respectively, while the dollar was 0.8 percent weaker at $1.1250 against the euro.

In today’s data, Spanish CPI came in better than expected at 0.1 percent, with US pending home sales month-over-month in May up 0.9 percent, off forecasts of 1.3 percent.

As for the other precious metals, Comex silver for July delivery was down 5.5 cents at $15.680 per ounce. Trade has ranged from $15.635 to $15.995.

Platinum futures for July delivery on the Nymex fell $0.20 at $1,080.50 per ounce, while the most-actively traded palladium contract was at $666.90, down $11.70.

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Gold climbs, euro slips as possible Greek exit nears

Otmane El Rhazi from The Bullion Desk.

Gold prices rose in early-morning US trading period after talks between Greece and its creditors dissolved over the weekend, nudging the country closer to the eurozone exit door.

Gold for August delivery on the Comex division of the New York Mercantile Exchange was last up $9.20 or 0.8 percent at $1,182.40 per ounce. Trade has ranged from $1,175.40 to $1,187.60.

On Sunday, the Greek government introduced capital controls after the European Central Bank (ECB) refused to increase emergency loans, deciding instead to maintain them at the current level. Greek Prime Minister Alexis Tsipras responded by pulling out of talks and forcing a closure of banks this week.

Now the Greek people will decide their future in the bloc in a referendum. A rejection of further pension cuts could set the stage for a Greek exit from the bloc – the so-called Grexit. An unprecedented – for an advanced economy – technical default could have far-reaching consequences for national economies.

The country must make a repayment of 1.5 billion euros to the International Monetary Fund by tomorrow, with IMF managing director Christine Lagarde stating that no extensions will be provided. The country owes 9.7 billion euros to the IMF this year and 6.6 billion euros to the ECB in July and August alone.

“The debt crisis in Greece, which escalated dramatically over the weekend, is driving up gold prices as the new week gets underway.” Commerzbank said. “The uncertainty about what will happen next in and to Greece should contribute to solid demand for gold and lend support to its price.”

Gold is typically seen as a safe haven by investors but its price has not changed much, giving pause to some market observers.

“Investors are simply not that interested in gold at present and physical demand is weak.” FastMarkets head of research William Adams said. “We are surprised how weak the performance of gold has been today, given the escalation of the Greece issue.”

Elsewhere, the People’s Bank of China cut the one-year lending rate by 25 basis points to 4.85 percent – its fourth cut since November – and lowered the amount of reserves certain banks are required to hold by 50 basis points. It also cut the one-year deposit rate rate by 25 basis points to 2.0 percent.

In wider markets, Germany’s DAX and France’s CAC-40 were down 2.7 percent and 3.1 percent respectively, while the euro was 0.3 percent weaker at 1.1134 against the dollar.

In today’s data, Spanish CPI came in better than expected at 0.1 percent, with German preliminary CPI and US pending home sales to come.

As for the other precious metals, Comex silver for July delivery was up 1.05 cents at $15.840 per ounce. Trade has ranged from $15.750 to $15.995.

Platinum futures for July delivery on the Nymex rose $2.80 at $1,083.50 per ounce, while the most actively traded palladium contract was at $673.90, down $4.70.

 

(Editing by Mark Shaw)

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China to launch yuan-denominated gold fix this year – Economic Times

Otmane El Rhazi from The Bullion Desk.

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Shanghai Gold Exchange in talks to list products on CME – Reuters

Otmane El Rhazi from The Bullion Desk.

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Wing Fung Futures Precious Metals Commentary

Otmane El Rhazi from The Bullion Desk.

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Scotiabank’s Daily Gold & Silver Marketwatch

Otmane El Rhazi from The Bullion Desk.

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Bullion Market Report – RSBL

Otmane El Rhazi from The Bullion Desk.

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Gold price edges up, equity markets tumble on Greek turmoil

Otmane El Rhazi from The Bullion Desk.

The gold price eked out a gain on Monday morning while world stock markets tumbled in the face of a potential Greek default.

Spot gold was last at $1,179.00/1,179.80 per ounce, up $4.40 on Friday’s close. Demand for safe havens is propping up the market after Greece pulled out of emergency meetings with creditors over the weekend and called for a referendum on Sunday to vote on the proposed bailout terms.

The country has shuttered its banks for at least a week and imposed capital controls after the European Central Bank froze emergency liquidity assistance to Greek banks at current levels.

Greece must make a 1.6-billion-euro payment to the IMF on Tuesday, the same day that its current bailout agreement is set to expire.

European and Asian stock markets plunged on the open as investors scrambled out of riskier assets. The Dax was last down 4.2 percent, the Euro Stoxx 4.32 percent and the Cac-40 4.13 percent. Asian markets were also hit hard – the Hang Seng was down 2.78 percent and the Nikkei 2.8 percent.

The euro is also down to its lowest since June 2 against the dollar at 1.0967, having hit a session low at 1.0967.

Despite the weaker euro, gold’s credentials as a source of safe-haven asset is propping up the metal. Many questions remain, ANZ said, particularly whether failure to pay the IMF mean an imminent exit from the euro.

“The only thing that we know for sure is that uncertainty is high, and in that environment, many markets will catch a safe-haven bid,” it said.

In other metals, silver was up seven cents at $15.83/15.88 per ounce, palladium was down $3 at $670/676 and platinum was $5 lower at $1,068/1,078.

Elsewhere, the People’s Bank of China cut the one-year lending rate by 25 basis points to 4.85 percent – its fourth cut since November – and lowered the amount of reserves certain banks are required to hold by 50 basis points. It also cut the one-year deposit rate rate by 25 basis points to 2.0 percent.

In today’s data, Spanish CPI came in better than expected at 0.1 percent, with German preliminary CPI and US pending home sales to come.

 

(Editing by Mark Shaw)

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Gold gaps higher on Greece, base metals generally weaker

Otmane El Rhazi from The Bullion Desk.

Precious metals were weaker on Friday they closed down an average of 0.2 percent, silver spiked down 2.1 percent at one stage to $15.54, but that was soon reversed, but it still closed off 0.6 percent at $15.78. Gold reached a high of $1,179, a low of 1,168.70 and closed up 0.1 percent at $1,175.

The base metals put in a mixed performance on Friday – at the day’s highs prices were up an average of 0.7 percent, at the day’s lows they were down one percent on average, they closed down 0.6 percent, with nickel down 2.2 percent, aluminium and lead were down 0.9 percent, while copper closed up 0.6 percent at $5,792.50.

This morning, gold and silver are up on safe-haven buying after Greece called a referendum and the Chinese equity market continues to correct sharply. Gold is up 0.8 percent at $1,183.90, silver is up one percent at $15.93, while the PGMs are off 0.6 percent. Considering the drama, especially in Europe, it is still surprising that gold is not attracting more interest.

The base metals are down this morning by an average of 0.7 percent as the uncertainty over Greece and in China weighs on sentiment, with nickel continuing to fall heavily; it is down 2.3 percent at $12,155, which is a fresh low for the year and the lowest since May 2009. Aluminium, lead, zinc and tin, are down between 0.4 and 0.7 percent, while copper is off just 0.1 percent at $5,789. Volume on the LME is very high at 9,900, with high volumes seen in copper, nickel and zinc.

In Shanghai, the base metals are off an average of 0.7 percent, with nickel down 3.5 percent, zinc is off 0.7 percent, lead is off 0.5 percent, tin is down 0.3 percent, while aluminium is unchanged and copper is up 0.7 percent at Rmb 42,300. Spot copper in Changjiang is up 0.5 percent at Rmb 42,600-42,750, the backwardation with the futures is at an equivalent to $72 per tonne and the LME/Shanghai copper arb ratio is at 1 to 7.36 for July, which is getting close to reopening the arb window.

Equities – the Euro Stoxx 50 and Dow were up around 0.3 percent on Friday, but Asia is weaker on the back of Greece and the correction in China, with the CSI 300 now off 2.1 percent, despite an interest rate cut over the weekend. The Nikkei is down 2.7 percent, the Hang Seng is down 2.3 percent and the Kospi is off 1.4 percent. Indications are that European equities will open down around 4.5 percent.

Currencies – the dollar index has gapped higher on safe-haven concerns – it has been up to 96.39, but is last at 96.00, the euro dropped to a low of 1.0967, last at 1.1037, sterling is little changed at 1.5723, the yen is stronger at 122.66, the aussie is at 0.7648, the yuan is weaker at 6.2095, as is the rouble at 55.26.

The economic agenda is fairly busy but is likely to be overshadowed by how the markets react to Greece. Data out already shows Japan’s retail sales climbed 3 percent, but industrial production fell 2.2 percent. Later we get German and Spanish CPI, UK lending data and US pending home sales – see table below for more details.

Gold prices gapped higher in early trading, but prices are already drifting lower, the same is true for silver and the PGMs. The fact all precious metals prices are relatively weak and are struggling to hold on to early gains, highlights that gold remains out of favour with investors and physical demand for precious metals is weak. This does not bode well for firmer prices, which we remain surprised about. The pullback in Chinese equities might lead to some money moving back into precious metals, although that might be a secondary reaction for the days and weeks ahead.

The base metals are for the most part looking weak and given the uncertainty over Greece that is not surprising, but copper is bucking the trend and is trying to push higher. Clearance of resistance around $5,830, would suggest a rally is getting underway. Falling copper stocks in China and a possible opening of the arb window may well provide support for LME prices.

 

Overnight Performance
BST	06:58	+/-	+/- %	Lots
Cu	5789	-3.5	-0.1%	4494
Al	1699	-8	-0.5%	889
Ni	12155	-280	-2.3%	2916
Zn	2019	-8	-0.4%	1187
Pb	1768.5	-12	-0.7%	397
Sn	14780	-95	-0.6%	17
Steel	300	0	0.0%	Total
	Average (BM ex-Steel)		-0.7%	9,900
Gold	1183.9	8.9	0.8%
Silver	15.93	0.15	1.0%
Platinum	1073	-5	-0.5%
Palladium	671.5	-4.5	-0.7%
	Average PM		0.1%

 

SHFE Prices 06:58 BST		Change	% Change
Cu	42300	290	0.7%
AL	12745	-5	0.0%
Zn	15515	-115	-0.7%
Pb	13040	-60	-0.5%
Ni	90910	-3320	-3.5%
Sn	111940	-350	-0.3%
Average change (base metals)			-0.7%
Rebar	2210	-11	-0.5%
Au	239.3	1.6	0.7%
Ag	3484	-1	0.0%

 

Economic Agenda
BST	Country	Data	ACTUAL	Expected	Previous
12:50am	Japan	Retail Sales y/y	3.0%	2.1%	4.9%
12:50am	Japan	Prelim Industrial Production m/m	-2.2%	-0.8%	1.2%
All Day	Italy	Italian Bank Holiday
All Day	Germany	German Prelim CPI m/m		0.1%	0.1%
8:00am	Spain	Spanish Flash CPI y/y		-0.1%	-0.2%
9:30am	UK	Net Lending to Individuals m/m		3.3B	2.9B
9:30am	UK	M4 Money Supply m/m		0.5%	0.4%
9:30am	UK	Mortgage Approvals		69K	68K
3:00pm	US	Pending Home Sales m/m		1.3%	3.4%

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Gold climbs on safe-haven demand as Greece fails to reach a deal

Otmane El Rhazi from The Bullion Desk.

Gold moved higher in the Asian trading hours on Monday after Greece failed to reach a deal with its international lenders to avert a default.

The spot gold price was last at $1,181/1,182 per ounce, up $6 on Friday’s close. Trade has ranged from $1,180 to $1,188 so far.

Over the weekend, Greek Prime Minister Alexis Tsipras broke off debt talks and called for a national referendum in Greek parliament on July 5 regarding the bailout terms that have been proposed by Greece’s creditors.

Greece has also declared capital controls with the closure of banks, and limits on withdrawals as the European Central Bank (ECB) decided not to increase its emergency liquidity assistance (ELA) to Greek banks beyond current levels.

Greece now risks default with a 1.6 billion euros payment due to the International Monetary Fund (IMF) on Tuesday.

“The only thing that we know for sure is that uncertainty is high, and in that environment, many markets will catch a safe haven bid,” ANZ said.

Elsewhere, the People’s Bank of China cut the one-year lending rate by 25 basis points to 4.85 percent – its fourth cut since November – and lowered the amount of reserves certain banks are required to hold by 50 basis points. The one year deposit rate was also lowered by 25 basis points, to two percent.

The move followed a nearly 20 percent drop in China’s stock market over the past two weeks.

Today’s data includes German preliminary CPI, Spanish flash CPI and from the US, pending home sales.

As for the other precious metals, silver was largely unchanged at $15.87/15.92. Platinum at $1,070/1,080 was down $8, while palladium at $673/678 fell $3.

On the Shanghai Futures Exchange (SHFE) gold for December delivery was unchanged at 239 yuan per gram.

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Gold closes at 3-week lows as Greek tragedy persists

Otmane El Rhazi from The Bullion Desk.

Gold prices were little changed during a listless trading period as investors await further clarification from ongoing Greek negotiations.

Gold for August delivery on the Comex division of the New York Mercantile Exchange rose $1.40 to close at $1,173.20 per ounce, the lowest price since June 5. Trade has ranged from $1,167.10 to $1,178.00.

Gold finished lower four of five sessions this week as a host of data releases painted a murky picture of exactly how the US economy is doing.

Meanwhile in Greece, eurozone finance ministers concluded another round of talks yesterday – attempts to broker a deal between Greece and its creditors have remained fruitless. Fresh talks are tabled for Saturday, with a 1.6-billion-euro repayment due to the International Monetary Fund by the end of the month hanging over proceedings.

Should Greece not have some kind of deal in place by Sunday night, Greek banks will remain closed on Monday and capital controls will be introduced, JP Morgan suggested. The chances of the country averting a default will start to look very slim.

“It’s good to take a step back and put the Greece tit-for-tat aside as the creditors and officials plan on playing another (final) innings tomorrow morning at yet another eurogroup meeting,” Societe Generale said. “No breakthrough probably means capital controls after we return from the weekend when banks in Athens open on Monday morning.”

However, gold’s outlook in both the short and long term remains bearish even should there be a resolution to the long-running Greek debt saga.

“Although we acknowledge a small pick-up in investor interest toward gold because of heightened uncertainty over Greece, we believe that the short-term risks are skewed to the downside because either a Greek default would force investors to liquidate riskier assets, including gold, or a deal would reduce safe-have buying,” FastMarkets analyst Boris Mikanikrezai said.

Switching to equities, the Dow Jones industrial average was up 0.2 percent and S&P was down 0.2 percent, while the dollar was 0.5 percent stronger at $1.1156 against the euro.

In US data, University of Michigan Consumer sentiment was 96.1, besting forecasts of 94.6, while inflation was rose 2.7 percent.

In Europe, German import prices fell short at -0.2 percent, as did M3 money supply at 5.0 percent.

As for the other precious metals, Comex silver for July delivery was down 5.8 cents at $15.750 per ounce. Trade has ranged from $15.450 to $15.865.

Platinum futures for July delivery on the Nymex fell $1.90 at $1,082.50 per ounce, while the most-actively traded palladium contract was at $679.90, up 55 cents.

(Editing by Tom Jennemann)

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Gold price hits 3-wk low, Greece edges closer to deal

Otmane El Rhazi from The Bullion Desk.

The gold price dropped to a three-week low and European equity markets ticked higher on Friday afternoon on reports that Greece is edging closer to a bailout deal.

Spot gold was last at $1,170.40/1,172.20 per ounce, down $2.80 on Thursday’s close, having earlier hit $1,168.70.

Growing optimism that Greece will secure a deal with its creditors bolstered European stock markets, persuading investors to put their money in riskier assets.

The Euro Stoxx moved up 0.57 percent, the Dax 0.33 percent and the Cac-40 0.84 percent – all had been in negative territory. The euro was slightly weaker at 1.1180 against the dollar.

Eurozone finance ministers met yesterday in another attempt resolve the deadlock between Athens and its creditors but failed to reach an agreement. Still, there are reports that a cash-for-reform deal is on the table that would unlock the necessary funds for Greece to avoid an exit from the eurozone – for now, at least – after the gap between the two sides narrowed.

Talks will resume on Saturday; should Greece not have some kind of deal in place by Sunday night, the chances of a Grexit will increase exponentially.

In earlier data, the Tokyo core CPI at 0.1 percent was as expected as was the unemployment rate at 3.3 percent. Household spending increased to 4.8 percent, as did the national core CPI at 0.1 percent against consensus of 0 percent.

In Europe, German import prices fell short at -0.2 percent, as did M3 money supply at 5.0 percent. Still to come from the US are revised University of Michigan consumer sentiment and inflation expectations.

In other metals, silver was down 10 cents at $15.74/15.79 per ounce while platinum was $9 lower at $1,071/1,076. Palladium dropped further to $668/674, down $7 and its lowest in two years - it looks on track for a third consecutive day of declines.

 

(Editing by Mark Shaw)

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Gold prices rangebound, Greek talks to resume on Saturday

Otmane El Rhazi from The Bullion Desk.

Gold prices were in the doldrums in US trading early on Friday while investors stuck to the sidelines ahead of yet more Greek negotiations this weekend.

Gold for August delivery on the Comex division of the New York Mercantile Exchange was unchanged at $1,171,80 per ounce. Trade has ranged from $1,169.30 to $1,178.00.

Eurozone finance ministers concluded another round of talks yesterday – attempts to broker a deal between Greece and its creditors have remained fruitless. Fresh talks are tabled for Saturday, with a 1.6-billion-euro repayment due to the International Monetary Fund by the end of the month hanging over proceedings.

Should Greece not have some kind of deal in place by Sunday night, Greek banks will remain closed on Monday and capital controls will be introduced, JP Morgan suggested. The chances of the country averting a default will start to look very slim.

“Uncertainty looms over the outcome of the negotiations between Greece and its creditors,” Scotiabank said. “On the other hand, recent positive US economic data has strengthened the dollar and has led markets to speculate that the US Fed could raise interest rates this year.”

Yesterday, US weekly unemployment was in line with forecasts at 271,000, the 18 straight month of readings below 300,000. The dollar was 0.1-percent stronger at 1.1192 against the euro.

Still, gold’s outlook in both the short and long terms remains bearish even should there be a resolution to the long-running Greek debt saga.

“Although we acknowledge a small pick-up in investor interest toward gold because of heightened uncertainty over Greece, we believe that the short-term risks are skewed to the downside because either a Greek default would force investors to liquidate riskier assets, including gold, or a deal would reduce safe-have buying,” FastMarkets analyst Boris Mikanikrezai said.

In data released earlier today, Japan’s core CPI at 0.1 percent was as expected as was the unemployment rate at 3.3 percent. Household spending increased to 4.8 percent, as did the national core CPI at 0.1 percent against consensus of 0 percent.

In Europe, German import prices fell short at -0.2 percent, as did M3 money supply at 5.0 percent. Still to come from the US are revised University of Michigan consumer sentiment and inflation expectations.

In wider markets, Germany’s DAX was down 0.2 percent, while France’s CAC-40 was up 0.5 percent.

As for the other precious metals, Comex silver for July delivery was down 7.8 cents at $15.730 per ounce. Trade has ranged from $15.450 to $15.865.

Platinum futures for July delivery on the Nymex fell $7.50 to $1,074.90 per ounce, while the most actively traded palladium contract was at $674.50, down $4.85.

 

(Additional Reporting by Ian Walker, editing by Mark Shaw)

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GOLD WEBCAST – Gold traders await news amid impasse in Greek debt saga

Otmane El Rhazi from The Bullion Desk.

European equity markets opened lower this morning, reflecting the prospect of Greece failing to reach a last-minute deal with creditors. Eurozone finance ministers met yesterday in another attempt resolve the deadlock between Athens and its creditors but failed to thrash out a deal. European politicians will now be preparing for talks to resume on Saturday; should Greece not have some kind Should a deal not be reached by Sunday night, Greek banks will remain closed on Monday and capital controls will be introduced, JP Morgan suggested. European bourses are just in negative territory, having performed well earlier in the week when positivity about a likely deal spread to investors.

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Gold price nudges higher after Grexit fears hit European equities

Otmane El Rhazi from The Bullion Desk.

The gold price remained flat on Friday morning while the markets remained fixed on developments in the Greek debt saga.

Spot gold was last up $1.80 on Thursday’s close at $1,175.00/1,175.80 per ounce, having traded in a $7 intraday range so far.

European equity markets opened lower this morning, reflecting the prospect of Greece failing to reach a last-minute deal with creditors.

Eurozone finance ministers met yesterday in another attempt resolve the deadlock between Athens and its creditors but failed to thrash out a deal. European politicians will now be preparing for talks to resume on Saturday; should Greece not have some kind of deal in place by Sunday, the chances of the country averting a default will start to look exceedingly slim.

“The Greece debacle and the apparent lack of interest in gold speak volumes about sentiment. If an eleventh-hour deal is agreed, gold may well sell off – still, there has not be much on the upside for gold from Greece so perhaps there will not be much of a negative reaction,” FastMarkets analyst William Adams said.

Should a deal not be reached by Sunday night, Greek banks will remain closed on Monday and capital controls will be introduced, JP Morgan suggested.

European bourses are just in negative territory, having performed well earlier in the week when positivity about a likely deal spread to investors.

Today the Euro Stoxx is down 0.76 percent, the Dax 0.5 percent and the Cac 40 0.74 percent. Still, the euro is holding steady at 1.1210 against the euro. Earlier in Asia, the Hang Seng and Nikkei both ended in negative territory and the Shanghai Composite closed down 7.87 percent – around the largest daily decline in eight years, MKS noted

In earlier data, the Tokyo core CPI at 0.1 percent was as expected as was the unemployment rate at 3.3 percent. Household spending increased to 4.8 percent, as did the national core CPI at 0.1 percent against consensus of 0 percent.

In Europe, German import prices fell short at -0.2 percent, as did M3 money supply at 5.0 percent.

Still to come from the US are revised University of Michigan consumer sentiment and inflation expectations.

In the other metals, silver was down five cents at $15.79/15.84 per ounce, platinum $6.50 at $1,073/1,078 and palladium $1.50 at $673/678, having hit its lowest in two years on Thursday at $671.

(Editing by Mark Shaw)

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TOCOM granted licence to use LBMA Good Delivery list

Otmane El Rhazi from The Bullion Desk.

The Tokyo Commodity Exchange (TOCOM) has been granted a licence to use the LBMA’s Good Delivery list as part of its own accreditation procedures.

NYSE Liffe US was the first exchange to be granted a licence in September 2011, followed by NYMEX/CME in February 2013.

“I am delighted to sign this licencing agreement, which shall promote enhanced cooperation between our two organisations,” Takamichi Hamada, President and CEO of TOCOM “We intend to use this opportunity to more actively develop relationships with the members of the global bullion industry to expand our gold and silver markets,” he added.

The London Good Delivery List of Acceptable Refiners of gold and silver is maintained by the LBMA, by which it is copyrighted. It lists those refineries whose gold and silver bars have been found, when originally tested, to meet the required standard for acceptability in the London bullion market. The list now includes 83 gold and 73 silver refiners.

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Gold price weak, market watching Greece and China’s equity correction

Otmane El Rhazi from The Bullion Desk.

Precious metals were mixed yesterday, palladium dropped 3.2 percent to  $671 at one stage before closing down 2.4 percent at $677, while platinum rallied 1.5 percent to $1,082, silver closed up 0.3 percent and the gold price was off 0.4 percent at $1,173.50 – again the fact gold is getting no traction on the back of the Greek saga shows how investors are just not interested in the metal.

The base metals had a choppy day’s trading yesterday, at the day’s lows, excluding tin, they were down an average of 0.9 percent, but ended the day off an average of 0.3 percent. Tin, however, had a much weaker day, it closed down 3.2 percent at $14,805, with the day’s lows at $14,705. Concerns over Greece and a general lack of bullishness seems to be weighing on sentiment.

This morning the base metals are mixed, although there is a negative bias if you take out the 1.2 percent rebound in tin. Copper is unchanged at $5,760, while the rest are off between 0.2 and 0.4 percent. Volume remains light with 2,254 lots traded – see table below. Interest in the metals markets seems to be extremely low, as seen by the volumes.

The precious metals remain on a back footing with average losses of 0.2 percent with palladium off 0.6 percent at $673, platinum is off 0.4 percent at $1,078, silver is off 0.1 percent at $15.85 and the gold price is up 0.1 percent at $1,174.60.

In Shanghai, the base metals have not followed the LME prices down to the same extent – the metals are off an average of 0.4 percent, with tin off 1.2 percent, nickel is down 1.1 percent, lead is off 0.4 percent and zinc is off 0.2 percent, while aluminium is up slightly and copper is up 0.2 percent at Rmb 42,070. Spot copper in Changjiang is up 0.4 percent at Rmb 42,450-42,550, the backwardation with the futures is at an equivalent of $77 per tonne and the LME/Shanghai copper arb ratio is at 1 to 7.37 for the July date.

Precious metals in Shanghai are little changed with gold at Rmb 237.85 and silver off 0.1 percent at Rmb 3,497.

Equities are generally weaker with the Euro Stoxx 50 little changed, the Dow was off 0.4 percent, but the main feature is the continuing fall in China’s CSI 300 that is off 6.1 percent and is off 17 percent from its peak now. The Nikkei is off 0.1 percent, the Hang Seng is off 1.6 percent and the Kospi is up 0.4 percent. We wait to see if the turning tide in the CSI 300 starts to see money return to the bullion market as a safe-haven.

Currencies are for the most part flat-lined as the markets wait for a decision on Greece – latest rates are: dollar index 95.25, euro 1.1189, sterling 1.5739, yen 123.37, aussie 0.7718, rouble 54.39 and yuan 6.2060.

Data out already shows Japan’s household spending climbed 4.8 percent, with CPI rising 0.1 percent and the unemployment rate unchanged at 3.8 percent. German import prices have dropped 0.2 percent. Later we get EU M3 money supply, revised University of Michigan consumer sentiment and inflation expectations and later Bank of England’s Mark Carney is speaking. Dominating everything though is Greece but the Eurogroup is now not scheduled to meet until tomorrow.

The base metals are not looking too bad, most of the metals are consolidating, tin sold off yesterday and is waiting for direction today, but the likes of copper and aluminium seem to be attracting some scale down buying, which is providing support, but whether there is follow through interest remains to be seen. As we have said recently, we are surprised that there was not more of a positive reaction to recent PMI data – maybe there will be a delayed reaction. Also if money is now flowing out of equities in China, then some may find its way into the metals.

Precious metals are under pressure with palladium falling like a knife, gold and silver prices are weak but for now seem supported, while platinum seems to be attracting some buying. Given the Greece debacle and gold’s apparent lack of interest speaks volumes towards sentiment – if an 11^th-hour deal is agreed then gold may well sell-off – that said as there has not be much on the upside for gold on the back of Greek, perhaps there will not be much of a negative reaction. Physical demand for gold in China has been weak as investors have been pouring money into the stock market – now equities are correcting could mean investors look at other asset classes again.

 

Overnight Performance
BST	06:23	+/-	+/- %	Lots
Cu	5760	0	0.0%	1076
Al	1716	-7	-0.4%	319
Ni	12665	-45	-0.4%	236
Zn	2035	-5	-0.2%	505
Pb	1792.5	-4.5	-0.3%	112
Sn	14990	185	1.2%	6
Steel	300	0	0.0%	Total
	Average (BM ex-Steel)		0.0%	2,254
Gold	1174.6	1.1	0.1%
Silver	15.85	-0.02	-0.1%
Platinum	1078	-4	-0.4%
Palladium	673	-4	-0.6%
	Average PM		-0.2%

 

SHFE Prices 06:41 BST		Change	% Change
Cu	42070	100	0.2%
AL	12765	10	0.1%
Zn	15660	-30	-0.2%
Pb	13110	-55	-0.4%
Ni	94400	-1090	-1.1%
Sn	110700	-1370	-1.2%
Average change (base metals)			-0.4%
Rebar	2219	-8	-0.4%
Au	237.85	0	0.0%
Ag	3497	-4	-0.1%

 

Economic Agenda
BST	Country	Data	ACTUAL	Expected	Previous
12:30am	Japan	Household Spending y/y	4.8%	3.5%	-1.3%
12:30am	Japan	Tokyo Core CPI y/y	0.1%	0.1%	0.2%
12:30am	Japan	National Core CPI y/y	0.1%	0.0%	0.3%
12:30am	Japan	Unemployment Rate	3.3%	3.3%	3.3%
7:00am	Germany	German Import Prices m/m	-0.2%	0.2%	0.6%
9:00am	EU	M3 Money Supply y/y		5.4%	5.3%
9:00am	EU	Private Loans y/y		0.3%	0.0%
Day 2	EU	EU Economic Summit
3:00pm	US	Revised UoM Consumer Sentiment		94.6	94.6
3:00pm	US	Revised UoM Inflation Expectations			2.7%
3:15pm	UK	BOE Gov Carney Speaks

 

 

 

The post Gold price weak, market watching Greece and China’s equity correction appeared first on The Bullion Desk.

Gold price steady, market awaits Greek resolution

Otmane El Rhazi from The Bullion Desk.

Gold was steady in the Asian trading hours on Friday while investors wait on the sidelines as Greece and its international creditors remain in deadlock over its debt crisis.

The spot gold price was last little changed at $1,174.2/1,175 per ounce. Trade has ranged from 1,173.8 to $1,173.6 so far.

Despite intensive talks, there remains no resolution to the Greek debt crisis. Eurozone finance ministers met yesterday in another attempt to find a solution, with deadlock between Athens and its creditors, but failed to thrash out a deal – another meeting is scheduled for today.

“Despite the possible gold-bullish ramifications of a Greek default, gold prices did little, indicating investors are not yet focused on gold as a safe haven as regards the Greek crisis,” James Steel, HSBC analyst, said.

Greece faces sovereign debt default if it fails to make a 1.6-billion-euro IMF debt repayment by Tuesday June 30, which could force the country out of the EU single currency.

Elsewhere, despite an improving monsoon, the Indian market is still sluggish regarding gold demand, with discounts to London reported on the key Mumbai market, Steel noted.

“Premiums in Shanghai have risen, however, indicating better Chinese demand. We suspect that a further gold price drop may stimulate India demand, which shown itself to be historically price sensitive,” he added.

In US data overnight, weekly unemployment claims were in-line with forecasts at 271,000, the 18 straight month of unemployment under 300,000. Core PCE price index month-over-month in May also met expectations of a 0.1 percent increase, while personal spending month-over-month in May was up 0.9 percent, above forecasts of 0.7 percent.

Additionally, May personal income month-over-month was slightly below estimates at 0.5 percent, with consensus pegging a rise of 0.6 percent.

Today’s data includes German import prices, eurozone’s M3 money supply and private loans and from the US, UoM consumer sentiment and revised UoM inflation expectations.

As for the other precious metals, silver was little changed at $15.83/15.88. Platinum at $1,077/1,082 fell $5, while palladium at $674/680 was down $3.

On the Shanghai Futures Exchange (SHFE) gold for December delivery was down one yuan at 237 yuan per gram.

(Additional reporting by Ian Walker)

 

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