The metals put in a strong performance yesterday, reversing the weakness /indecision seen on Wednesday. The base metals closed up an average of 1.3 percent, zinc was the only one that moved lower after a large stock inflow and re-warranting of cancelled warrants – it closed down 0.2 percent. Copper closed at $5,392. Palladium rallied 2.3 percent, silver was up 0.9 percent, while gold prices and platinum were up around 0.3 percent, with gold at $1,112.
This morning the precious metals are generally firmer, gold and silver prices are slightly firmer, palladium is stronger with a 0.9 percent gain to $593.30, while platinum is up 0.4 percent.
Base metals are mixed, tin and nickel are off 0.7 and 0.4 percent respectively, lead, zinc and aluminium are up an average of 0.3 percent and copper is up 0.1 percent at $5,396. Volume on the LME has been light at 2,647 lots, with nickel busier with 893 lots than aluminium and zinc, while copper traded 1,106 lots.
In Shanghai, nickel is up the most with a 1.8 percent gain, technical problems at China’s Jinchuan nickel smelter is likely to be causing that, along with short-covering. Lead and zinc are down 0.1 percent, tin is up 0.6 percent, aluminium is up 0.1 percent and copper is up 0.4 percent at Rmb 41,110.
Spot copper in Changjiang is up 0.7 percent at Rmb 41,100 to 41,200 so is fairly flat with the futures and the LME/Shanghai copper arb window is open with the ratio at 7.61.
In other metals in Shanghai, silver is up 0.4 percent, gold is unchanged, as is steel rebar, while iron ore continues to edge higher, last at $59.
Equities were mixed with the Euro Stoxx 50 off 1.5 percent as it followed the weaker US equities from Wednesday, but the Dow closed up 0.5 percent after a volatile day and the firmer tone has flowed into Asia with the Nikkei and CSI 300 both up 0.1 percent, the Hang Seng is up 1.1 percent but the Kospi is down 0.8 percent as the Bank of Korea kept rates unchanged. Trading is now likely to become increasing nervous ahead of next Thursday’s FOMC rate decision.
The dollar weakened again yesterday with the dollar index dropping to 95.44 and that has given currencies a lift with the euro at 1.1294, sterling at 1.5453, the aussie at 0.7062, the rouble at 66.89, while the yen is flat at 120.70. The PBoC intervened in the offshore yuan market with the yuan climbing to 6.3994, the rupiah, real, and rupee remain weak, while the rand is firmer.
The dollar is now likely to become increasing nervous over data, yesterday’s weakness was put down to a disappointing wholesale inventories number. Today’s data includes German CPI, Italian industrial production, UK construction PMI and data out in the US includes PPI, University of Michigan consumer sentiment, inflations expectations and later the Federal budget balance There is an Ecofin meeting and UK’s Monetary Policy Committee member Kristin Forbes is speaking – see table below for more details.
The base metals are still trying higher, most are nudging up against recent resistance but the rebounds look well placed to continue and a weaker dollar may well help give them a push. Production disruptions and cutback noise are underpinning the firmer tone, but we feel short-covering may well be the main driver. All markets are likely to get increasingly nervous ahead of next week’s Fed decision.
Gold prices pulled back on Wednesday and prices are consolidating around the $1,110 level, given the weaker dollar and the potential for further contagion from China, especially in emerging markets, we would not be surprised to see gold work higher. Silver is watching gold, but is holding up relatively well. Platinum is holding up above support, while palladium is positioned just below resistance and looks well placed to push higher.
| BST | 06:12 | +/- | +/- % | Lots |
| Cu | 5,396 | 4 | 0.1% | 1106 |
| Al | 1638 | 4 | 0.2% | 235 |
| Ni | 10340 | -45 | -0.4% | 893 |
| Zn | 1819 | 6.5 | 0.4% | 365 |
| Pb | 1731 | 5 | 0.3% | 26 |
| Sn | 15200 | -100 | -0.7% | 22 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | 0.0% | 2,647 | ||
| Gold | 1112.5 | 0.6 | 0.1% | |
| Silver | 14.74 | 0.03 | 0.2% | |
| Platinum | 985.4 | 4.4 | 0.4% | |
| Palladium | 593.3 | 5.3 | 0.9% | |
| Average PM | 0.4% | |||
| SHFE Prices 6:13 BST | Change | % Change | |
| Cu | 41110 | 160 | 0.4% |
| AL | 12030 | 15 | 0.1% |
| Zn | 14865 | -10 | -0.1% |
| Pb | 13345 | -10 | -0.1% |
| Ni | 79200 | 1410 | 1.8% |
| Sn | 103150 | 590 | 0.6% |
| Average change (base metals) | 236.5 | 0.5% | |
| Rebar | 1953 | 0 | 0.0% |
| Au | 230.15 | 0.05 | 0.0% |
| Ag | 3337 | 14 | 0.4% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:50am | Japan | BSI Manufacturing Index | 11 | -1.9 | -6 |
| 7:00am | Germany | German Final CPI m/m | 0.0% | 0.0% | |
| 7:00am | Germany | German WPI m/m | 0.2% | 0.1% | |
| 9:00am | Italy | Italian Industrial Production m/m | 0.9% | -1.1% | |
| 9:30am | UK | Construction Output m/m | 0.5% | 0.9% | |
| 9:30am | UK | Consumer Inflation Expectations | 2.2% | ||
| Day 1 | EU | ECOFIN Meetings | |||
| 12:30pm | UK | MPC Member Forbes Speaks | |||
| 1:30pm | US | PPI m/m | -0.1% | 0.2% | |
| 1:30pm | US | Core PPI m/m | 0.1% | 0.3% | |
| 3:00pm | US | Prelim UoM Consumer Sentiment | 91.4 | 91.9 | |
| 3:00pm | US | Prelim UoM Inflation Expectations | 2.8% | ||
| 7:00pm | US | Federal Budget Balance | -82.3B | -149.2B | |
The post Gold prices quiet, but a weaker dollar may provide lift appeared first on The Bullion Desk.
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