The base metals continued to correct yesterday with average losses of two percent with copper joining most of the other metals’ retreat, the exception now is tin that is still holding up well. Nickel fell the most, it dropped a massive 5.5 percent to $12,950, copper fell 2.4 percent to $6,225 and zinc was off 2.1 percent at $2,235. Tin closed up 0.2 percent at $15,980.
Precious metals came under pressure yesterday – the main driver being the stronger dollar that in turn was being driven by better than expected US housing data. Silver fell 3.4 percent to $17.10, platinum was off two percent and gold and palladium were down 1.3 percent with gold at $1,208.60 – so yet another rally seems to have stalled.
This morning the base metals are mixed with copper and aluminium up around 0.3 percent, with copper at $6,241, while the rest are off an average of 0.5 percent, led by a 0.8 percent decline in tin. The pullbacks have now been most severe in aluminium and nickel that have given back around 78 percent of the rally gains, while lead and zinc have retraced around 44 percent and copper has given back 24 percent of its gains. Volume has picked to 3,097 lots as of 06:05 BST, but is still light overall.
Precious metals are little changed this morning with the gold price at $1,208.60, silver at $17.10 and the PGMs slightly firmer.
In Shanghai, the July base metals are down across the board with average losses of 1.9 percent, led by a five percent drop in nickel – copper is down 1.9 percent at Rmb 44,940. Aluminium is off the least, it is down just 0.1 percent at Rmb 13,220.
Spot copper in Changjiang is down 1.9 percent at Rmb 45,100-45,200, the backwardation with the futures is at an equivalent of around $40 per tonne and the LME/Shanghai copper arb ratio is wider at 1 to 7.24.
Precious metals in Shanghai are weaker with silver down 3.2 percent at Rmb 3,632/kg and the gold price off 0.5 percent at Rmb 244.95/g.
Equities – were stronger in Europe yesterday with the Euro Stoxx 50 up 2.3 percent, the US was mixed with the Dow up slightly, but the S&P 500 was off slightly. Asia is also mixed this morning with the Nikkei up 1.2 percent helped by the weaker yen, the Hang Seng is off 0.3 percent, the CSI 300 is up 1.4 percent – after strong gains yesterday, and the Kospi is up 0.9 percent.
Currencies – the dollar got some lift from the better US data, the dollar index is last at 95.34 after a recent low of 93.13, the euro is weaker at 1.1141, sterling is weaker at 1.5510, as are the yen at 120.88, the aussie at 0.7925, while the rouble and yuan are firmer at 49.53 and 6.2060.
On the economic front Japan’s preliminary GDP is up 0.6 percent, after a previous reading of 0.4 percent, GDP price index was up 3.4 percent. Later we get data on German PPI, the UK’s Monetary Policy Committee’s voting record, US crude oil inventories, the FOMC Meeting minutes and FOMC member Charles Evans is speaking – see table below.
With copper prices now joining the general retreat in the base metals and with the dollar firmer, it does look as though the short-covering rallies of recent months have now ended and further weakness may follow. Tin is the exception, but supply restraint and falling LME stocks provide some fundamental reasons for that.
Although the latest rallies in the precious metals seem to have stalled, some progress had been made on the upside in recent weeks so, we see these pullbacks as a counter trend move. Strong equities and a firmer dollar are once again acting as headwinds, but we would expect dips to find support – we still feel investors may be in need of some safe-havens before too long, either on the back of Greece, or as equities correct.
| Overnight Performance | ||||
| BST | 06:05 | +/- | +/- % | Lots |
| Cu | 6241 | 16 | 0.3% | 1006 |
| Al | 1797.5 | 3 | 0.2% | 544 |
| Ni | 12885 | -65 | -0.5% | 684 |
| Zn | 2230 | -5 | -0.2% | 717 |
| Pb | 1939.5 | -5.5 | -0.3% | 127 |
| Sn | 15850 | -130 | -0.8% | 19 |
| Steel | 395 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | -0.2% | 3,097 | ||
| Gold | 1208.6 | 0 | 0.0% | |
| Silver | 17.1 | 0 | 0.0% | |
| Platinum | 1152.4 | 2.4 | 0.2% | |
| Palladium | 776 | 1 | 0.1% | |
| Average PM | 0.1% | |||
| SHFE Prices 06:38 BST | Change | % Change | |
| Cu | 44940 | -870 | -1.9% |
| AL | 13220 | -15 | -0.1% |
| Zn | 16690 | -145 | -0.9% |
| Pb | 13245 | -140 | -1.0% |
| Ni | 102340 | -5390 | -5.0% |
| Sn | 116130 | -2790 | -2.3% |
| Average change (base metals) | -1.9% | ||
| Rebar | 2201 | -12 | -0.5% |
| Au | 244.95 | -1.2 | -0.5% |
| Ag | 3632 | -119 | -3.2% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:50am | Japan | Prelim GDP q/q | 0.60% | 0.40% | 0.40% |
| 12:50am | Japan | Prelim GDP Price Index y/y | 3.40% | 3.60% | 2.40% |
| 7:00am | Germany | German PPI m/m | 0.10% | 0.10% | |
| 8:00am | US | FOMC Member Evans Speaks | |||
| 9:30am | UK | MPC Official Bank Rate Votes | 0-0-9 | 0-0-9 | |
| 9:30am | UK | MPC Asset Purchase Facility Votes | 0-0-9 | 0-0-9 | |
| 3:30pm | US | Crude Oil Inventories | -1.3M | -2.2M | |
| 7:00pm | US | FOMC Meeting Minutes | |||
The post Copper joins the other metals as prices correct appeared first on The Bullion Desk.
No comments:
Post a Comment