The metals put in a choppy performance on Monday – at the day’s highs prices were up an average of 0.8 percent led by a 1.3 percent gain in nickel and at the day’s lows they were down an average of 1.4 percent led by two percent drops in tin and lead. The base metals complex closed down an average of 1.1 percent, with copper off 0.2 percent at $6,380. On balance, after some strong gains in recent days it looks as though consolidation is in order.
Bullion prices sold off to varying degrees yesterday with the PGMs suffering the most with palladium closing down 2.3 percent at $779, which took prices back below its $788 break up level, platinum was off 1.5 percent, silver was down one percent and the gold bullion price was off 0.4 percent at $1,183.
This morning the most notable feature in the market is the low volume with only 2,082 lots traded on the LME as of 06:21 BST. The metals are mixed with nickel off one percent at $14,125, while tin is up 1.1 percent at $15,900, while the rest are little changed with zinc off 0.3 percent, lead and copper off 0.2 percent, with copper at $6,370 and aluminium at $1,876.
Bullion prices for the most part have not moved much overnight with the gold price at $1,183.10, the exception is platinum that is up 0.5 percent at $1,128.40. Some progress with Greece over its near term payments seems to have eased concerns, but with the dollar edging lower again, prices may well be underpinned.
In Shanghai, the July contracts have pulled backed across the board with an average decline of 0.7 percent, led by declines of around one percent in lead and zinc, while copper is off the least with a 0.2 percent drop to Rmb 45,710. Spot copper in Changjiang is up 0.1 percent at Rmb 45,800-45,950, which puts the backwardation at an equivalent of some $38 per tonne. The LME / Shanghai copper arb ratio is at 1 to 7.17 for the July date.
Precious metal prices in Shanghai are weaker with gold off slightly at Rmb 239.30/g and silver off 0.8 percent at Rmb 3,556/kg.
Equities – the Euro Stoxx 50 closed off 0.7 percent, the Dow closed down 0.5 percent, while Asia is mixed with the Nikkei off 0.2 percent, the Hang Seng off 0.3 percent, the Kospi little changed while the CSI 300 is up 0.7 percent.
Currencies – the dollar index’s rebound reached 95.26 yesterday, but is drifting again, last at 94.96 and the trend remains to the downside. The euro is consolidating, last at 1.1172, sterling remains upbeat at 1.5571, the yen is weak at 120.22, the aussie is firm at 0.7925, the rouble is flat at 51.00 as is the yuan at 6.2085.
The economic agenda is quite mixed today with UK BRC retail sales monitor dropping 2.4 percent, Japan’s leading indicators edged higher to 105.5 percent – data out later includes UK manufacturing and industrial production, US small business index, job openings and the Federal budget balance, plus FOMC member John Williams is speaking – see table below for more details.
For now the base metals seem to be consolidating with the likes of lead, zinc and aluminium falling the most, with pull-backs between 4.6 and 7.3 percent, while copper, tin and nickel are holding up relatively well. We are not surprised by tin and nickels performance, but would not be surprised if copper pulled back further.
The precious metals continue to consolidate in mid-to-low-ground as investor interest still seems to be focused on other asset classes – it may take deeper corrections in other markets, or a crisis over Greece, before investors need a safe-haven again.
| Overnight Performance | ||||
| BST | 06:21 | +/- | +/- % | Lots |
| Cu | 6370 | -10.5 | -0.2% | 625 |
| Al | 1876 | -0.5 | 0.0% | 125 |
| Ni | 14125 | -145 | -1.0% | 596 |
| Zn | 2301 | -6 | -0.3% | 592 |
| Pb | 2008 | -4.5 | -0.2% | 135 |
| Sn | 15900 | 170 | 1.1% | 9 |
| Steel | 395 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | -0.1% | 2,082 | ||
| Gold | 1183.1 | 0.1 | 0.0% | |
| Silver | 16.25 | -0.02 | -0.1% | |
| Platinum | 1128.4 | 5.4 | 0.5% | |
| Palladium | 779.8 | 0.8 | 0.1% | |
| Average PM | 0.1% | |||
| SHFE prices 06:21 BST | Change | % Change | |
| Cu | 45710 | -70 | -0.2% |
| AL | 13355 | -95 | -0.7% |
| Zn | 16870 | -165 | -1.0% |
| Pb | 13350 | -155 | -1.1% |
| Ni | 111630 | -920 | -0.8% |
| Sn | 120880 | -790 | -0.6% |
| Average change (base metals) | -0.7% | ||
| Rebar | 2289 | -18 | -0.8% |
| Au | 239.3 | -0.05 | 0.0% |
| Ag | 3556 | -30 | -0.8% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:01am | UK | BRC Retail Sales Monitor y/y | -2.4% | 3.2% | |
| 4:45am | Japan | 10-y Bond Auction | 0.43|2.2 | 0.37|2.7 | |
| 6:00am | Japan | Leading Indicators | 105.5% | 105.5% | 104.8% |
| 9:30am | UK | Manufacturing Production m/m | 0.3% | 0.4% | |
| 9:30am | UK | Industrial Production m/m | 0.0% | 0.1% | |
| All Day | EU | ECOFIN Meetings | |||
| 2:00pm | US | NFIB Small Business Index | 96.1 | 95.2 | |
| 3:00pm | UK | NIESR GDP Estimate | 0.6% | ||
| 3:00pm | US | JOLTS Job Openings | 5.16M | 5.13M | |
| 5:45pm | US | FOMC Member Williams Speaks | |||
| 7:00pm | US | Federal Budget Balance | 151.3B | -52.9B |
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