Precious metals closed down across the board yesterday with average losses of 1.3 percent, led by a 1.8 percent drop in silver to $15.95, but closely followed by a 1.7 percent drop in platinum, while the gold price dropped 0.6 percent at $1,195.90 – the stronger dollar seems to have been the main driver.
Precious metals are slightly firmer as they consolidate after yesterday’s weakness, average gains are 0.3 percent, although the gold price is unchanged at $1,196. The dollar remains strong with the index back at 98.12 after a low on Friday of 97.
Precious metals in Shanghai are weaker with silver off 1.3 percent and gold down 0.6 percent.
Equities rebounded yesterday after Friday show of weakness – the Euro Stoxx 50 and Dow both closed up 1.2 percent and Asia this morning is generally bullish with the Nikkei up 1.2 percent, helped by a weaker yen, the Hang Seng is up 1.9 percent, the CSI 300 is up 1.2 percent, while the Kospi is slightly weaker, off 0.1 percent.
Currencies – the dollar remains upbeat with the dollar index up at 98.12, so for now no double top, but more of a sideways range oscillating between 96.33 and 100.40. We still feel the direction of the dollar is a key direction setter for those metals not setting their own agenda. The euro is drifting last at 1.0718, as are sterling at 1.4883, the yen at 119.45, the aussie at 0.7695, the yuan at 6.2021 and the rouble is weaker too at 53.32. The emerging market currencies of the rand, rupee and rupiah are also weaker, although the real is holding on to recent rebound gains.
The economic agenda is light with ZEW economic sentiment in Germany and the EU out at 10 am and there is also a UK 30-year bond auction.
The precious metals have run into resistance with silver looking the weakest of the bunch, the gold price is consolidating in the lower ranges of late, as is platinum, while palladium is holding up relatively well. We remain more bullish for the PGMs than for bullion, but gold could well spring into action should equities get jitterier, or the situation in Greece deteriorates.
| Overnight Performance | ||||
| BST | 06:29 | +/- | +/- % | Lots |
| Cu | 6005 | 13 | 0.2% | 1549 |
| Al | 1818.5 | 4 | 0.2% | 107 |
| Ni | 12775 | 5 | 0.0% | 395 |
| Zn | 2182.5 | -7 | -0.3% | 448 |
| Pb | 2015.5 | -4.5 | -0.2% | 122 |
| Sn | 14985 | 175 | 1.2% | 10 |
| Steel | 395 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | 0.2% | 2,631 | ||
| Gold | 1196 | 0.1 | 0.0% | |
| Silver | 16.01 | 0.07 | 0.4% | |
| Platinum | 1150.2 | 5.2 | 0.5% | |
| Palladium | 774.3 | 3.3 | 0.4% | |
| Average PM | 0.3% | |||
| SHFE prices 06:46 BST | Change | % Change | |
| Cu | 43460 | -340 | -0.8% |
| AL | 13100 | -25 | -0.2% |
| Zn | 16420 | -145 | -0.9% |
| Pb | 13510 | -45 | -0.3% |
| Ni | 96300 | 390 | 0.4% |
| Sn | 111520 | -330 | -0.3% |
| Average change (base metals) | -0.3% | ||
| Rebar | 2231 | -46 | -2.0% |
| Au | 240.2 | -1.35 | -0.6% |
| Ag | 3484 | -46 | -1.3% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 10:00am | Germany | German ZEW Economic Sentiment | 55.6 | 54.8 | |
| 10:00am | EU | ZEW Economic Sentiment | 63.7 | 62.4 | |
| Tentative | UK | 30-y Bond Auction | 2.36|1.6 |
The post Stronger dollar acting as a headwind for the gold price appeared first on The Bullion Desk.
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