The base metals are consolidating this morning after a strong run higher last week, on average prices are off 0.5 percent led by a one percent pullback in copper to $6,363. Conversely precious metals are stronger by an average of 1.4 percent led by 1.9 percent gains in silver and platinum, while gold is up 0.9 percent at $1,188.50 and that is despite a firmer dollar.
In Shanghai, the July base metals contracts are off an average of 0.2 percent, with only nickel and copper stronger, while the rest are weaker. Copper is up 0.4 percent at Rmb 45,630, while spot copper in Changjiang is up 0.2 percent at Rmb 45,750-46,000, the backwardation with the futures is at an equivalent of some $60 percent tonne, while the LME/Shanghai copper arb ratio is at around 1 to 7.16.
Gold in Shanghai is little changed at Rmb 239.25, but silver is up one percent at Rmb 3,585.
Equities were firmer yesterday with the Euro Stoxx 50 up 0.5 percent and the Dow up 0.3 percent, but Asia is considerably weaker with the Hang Seng off 1.8 percent and the CSI down 3.7 percent.
Currencies the dollar index is rebounding, last at 95.76 after a low of 94.39, the euro is pulling back, last at 1.1098, sterling is at 1.5111 as the pound weakens ahead of the general election, the aussie is last at 0.7865, the yen is at 120.15, the rouble is at 52.05 and the yuan is at 6.2052. The RBA cut interest rates by 25 basis points.
The economic agenda was busy yesterday with the HSBC final reading of manufacturing PMI falling to 48.9, Spanish (54.2), Italian (53.8), French (48), German (52.1) and EU (52.0) manufacturing PMIs were mixed, with France falling further behind, while Italy has strengthened. Today’s agenda includes Spanish unemployment claims, UK construction PMI, EU economic forecast, EU PPI and US data includes the trade balance, final services PMI, ISM non-manufacturing PMI and the IBD/TIPP economic optimism reading – see table below for more details.
The base metals are consolidating this morning after the long weekend and after some strong gains of late it does look like prices may pull-back as the market adjusts to these higher levels – this is especially so if the dollar continues to rebound. The likes of lead and zinc look particularly vulnerable to a correction.
The precious metals found some support yesterday, but whether they can continue to rebound in light of the stronger dollar remains to be seen. Generally it does look as though the lower prices of late have attracted scale down buying so on balance we would look for more range trading.
| Overnight Performance | ||||
| BST | 07:27 | +/- | +/- % | Lots |
| Cu | 6363 | -61.5 | -1.0% | 3264 |
| Al | 1903 | -10 | -0.5% | 1120 |
| Ni | 13740 | -10 | -0.1% | 1989 |
| Zn | 2330.5 | -17.5 | -0.7% | 1311 |
| Pb | 2105 | -14 | -0.7% | 416 |
| Sn | 16000 | -50 | -0.3% | 5 |
| Steel | 395 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | -0.5% | 8,105 | ||
| Gold | 1188.5 | 10.8 | 0.9% | |
| Silver | 16.42 | 0.3 | 1.9% | |
| Platinum | 1147.8 | 21.8 | 1.9% | |
| Palladium | 777.9 | 6.9 | 0.9% | |
| Average PM | 1.4% | |||
| SHFE prices 07:34 BST | Change | % Change | |
| Cu | 45630 | 160 | 0.4% |
| AL | 13370 | -45 | -0.3% |
| Zn | 17075 | -105 | -0.6% |
| Pb | 13780 | -65 | -0.5% |
| Ni | 107160 | 160 | 0.1% |
| Sn | 118350 | -480 | -0.4% |
| Average change (base metals) | -0.2% | ||
| Rebar | 2351 | 24 | 1.0% |
| Au | 239.25 | 0.1 | 0.0% |
| Ag | 3585 | 34 | 1.0% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| Monday | China | HSBC Final Manufacturing PMI | 48.9 | 49.4 | 49.2 |
| Monday | Spain | Spanish Manufacturing PMI | 54.2 | 54.6 | 54.3 |
| Monday | Italy | Italian Manufacturing PMI | 53.8 | 53.4 | 53.3 |
| Monday | France | French Final Manufacturing PMI | 48 | 48.4 | 48.4 |
| Monday | Germany | German Final Manufacturing PMI | 52.1 | 51.9 | 51.9 |
| Monday | EU | Final Manufacturing PMI | 52 | 51.9 | 51.9 |
| Monday | EU | Sentix Investor Confidence | 19.6 | 19.5 | 20 |
| Monday | US | Factory Orders m/m | 2.1% | 2.1% | -0.1% |
| 2:30am | Aus | Trade Balance | -1.32B | -0.98B | -1.61B |
| 5:30am | Aus | Cash Rate | 2.0% | 2.0% | 2.25% |
| 7:45am | France | French Gov Budget Balance | -26.3B | -23.4B | |
| 8:00am | Spain | Spanish Unemployment Change | -64.8K | -60.2K | |
| 9:30am | UK | Construction PMI | 57.6 | 57.8 | |
| 10:00am | EU | EU Economic Forecasts | |||
| 10:00am | EU | PPI m/m | 0.3% | 0.5% | |
| 1:30pm | US | Trade Balance | -41.2B | -35.4B | |
| 2:45pm | US | Final Services PMI | 57.8 | 57.8 | |
| 3:00pm | US | ISM Non-Manufacturing PMI | 56.2 | 56.5 | |
| 3:00pm | US | IBD/TIPP Economic Optimism | 50.6 | 51.3 |
The post Gold prices firmer, while base metals consolidate appeared first on The Bullion Desk.
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