Dollar volatility behind price indecision

Otmane El Rhazi from The Bullion Desk.

The base metals continue to consolidate in their recent ranges while dollar fluctuations ahead of the key US jobs data drives price indecision. 

All of the base metals apart from zinc and nickel closed down yesterday, with aluminium having the most pronounced fall – it closed at a lower $1,871.

This morning they are moving higher probably following the bounce in China’s trade surplus to $34.1 billion in March from $3.1 billion in February, signalling a pick-up in global demand, although exports and imports both fell further than expected. Still, this has fuelled expectations that the Chinese government will introduce further stimulus measures.

The precious metals have also gained today following their across-the-board sell-off on Thursday on the dollar’s rebound to challenge overhead resistance. 

We expect the precious metals to remain in their ranges until this afternoon’s non-farm payrolls numbers; should these pull back above the 200,000 level, we would expect the dollar to push back higher to challenge selling below the January high at $95.49.

Gold is consolidating above the bottom of its recent consolidation range between the 7 DMA at $1,186 and the 23.6% Fibo at $1,181. We would expect renewed dollar strength to open up a retest of support from the May low at $1,170. 

BST	09:22	+/-	+/- %
Cu	6413	28	0.4%
Al	1892.5	12.5	0.7%
Ni	14250	100	0.7%
Zn	2373.5	4.5	0.2%
Pb	2076.5	-0.5	0.0%
Sn	16145	120	0.7%
Steel	395	0	0.0%
	Average (BM ex-Steel)		0.5%
Gold	1187.4	3.4	0.3%
Silver	16.37	0.07	0.4%
Platinum	1136.2	7.2	0.6%
Palladium	788.3	10.3	1.3%
	Average PM		0.7%

  

		Economic Agenda
BST	Country	Data	ACTUAL	Expected	Previous
00:50	JPY	Monetary Policy Meeting Minutes
03:10	CNY	Trade Balance	34.1B	34.5B	3.1B
All Day	EUR	French Bank Holiday
07:00	EUR	German Industrial Production m/m	-0.5%	0.4%	0.2%
07:00	EUR	German Trade Balance	19.3B	20.3B	20.0B
9:00	EUR	Italian Industrial Production m/m	0.4%	0.3%	0.6%
13:30	USD	Non-Farm Employment Change		228K	126K
13:30	USD	Unemployment Rate		5.4%	5.5%
13:30	USD	Average Hourly Earnings m/m		0.2%	0.3%
14:45	USD	FOMC Member Dudley Speaks
15:00	USD	Wholesale Inventories m/m		0.3%	0.3%

(Editing by Mark Shaw)

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