The base metals for the most part consolidated on Friday but there were winners and losers with lead leading on the downside with a 1.4 percent pullback, zinc was off 0.8 percent and tin was down 0.2 percent, while nickel closed up 1.3 percent at $14,330, aluminium was up 0.4 percent and copper closed up 0.1 percent at $6,391.50. Better than previous non-farm payrolls and unemployment rate helped sentiment, but at the same time it gave the dollar a boost.
Precious metals were firmer on Friday with palladium leading the advance with a 2.4 percent gain to $797, the rest were up an average of 0.7 percent with the gold bullion price closing at $1,187.70.
This morning the base metals remain mixed, nickel and tin are firmer by around 0.4 percent, while aluminium, copper and zinc are off around 0.4 percent and lead is little changed. Copper is last at $6,365. Volume has been average with 3,960 lots traded of 06:30 BST. Given China cut interest rates on Sunday for the third time in six months we would have expected the base metals to react more positively, but the actual slowdown in China remains a headwind.
Precious metals are little changed this morning with gold bullion at $1,188.10 and palladium off 0.2 percent.
In Shanghai, the July base metals contracts are mixed, with nickel up 2.2 percent and tin up 0.9 percent, while zinc is off 0.7 percent, copper is off 0.5 percent at Rmb 45,670 and the rest are little changed. Spot copper in Changjiang is down 0.3 percent at Rmb 45,750-45,920, the backwardation with the futures is at $40 per tonne and the LME/Shanghai copper arb ratio is at 1 to 7.18.
Precious metals are firmer with silver up 0.4 percent and the Shanghai gold price for July is up 0.1 percent at Rmb 239.05/g.
Equities – the US employment report provided a boost to equities on Friday – the Euro Stoxx 50 closed up 2.6 percent and the Dow was up 1.5 percent, while that and the rate cut in China have lifted Asian markets this morning with the Nikkei up 1.2 percent, the Hang Seng is up 0.6 percent, the CSI 300 is up 1.7 percent and the Kospi is up 0.7 percent. The rebound in equities and the dollar may well start to weigh on the precious metals again.
Currencies – the dollar index is firmer at 95.21, after a low of 93.88 on Wednesday, the euro is drifting from relative strength, last at 1.1141, cable is at 1.5413, the yen is flat at 119.92, the aussie is weak at 0.7888, the rouble is flat at 50.88 and is the yuan at 6.2080.
The economic agenda is light with the Bank of England’s rate decision, statement and asset purchase facility update, while US data includes Labor Market Conditions Index. There is also a Eurogroup meeting focused on Greece.
Most of the base metals are consolidating at lower numbers after strong gains, the exception is nickel that is still rebounding with prices up 18.8 percent from mid-April lows. On balance, we would not be surprised to see the copper, aluminium, lead and zinc consolidate further, while we still view nickel and tin as being oversold. The stronger dollar is also likely to act as a headwind to the metals.
The precious metals are consolidating in mid-ranges, the exception is palladium that is pushing higher having overcome resistance at $788. On balance, we feel there may well be a pick-up in demand for gold for safe-haven reasons given pullbacks in treasuries/bonds, the dollar and some signs of more jittery equity markets, but overall the precious metals markets seem in no hurry to rally.
| Overnight Performance | ||||
| BST | 06:30 | +/- | +/- % | Lots |
| Cu | 6365 | -26.5 | -0.4% | 1398 |
| Al | 1879 | -9 | -0.5% | 464 |
| Ni | 14405 | 75 | 0.5% | 1352 |
| Zn | 2344.5 | -6.5 | -0.3% | 638 |
| Pb | 2047 | -1.5 | -0.1% | 107 |
| Sn | 16050 | 50 | 0.3% | 1 |
| Steel | 395 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | -0.1% | 3,960 | ||
| Gold | 1188.1 | 0.4 | 0.0% | |
| Silver | 16.43 | 0 | 0.0% | |
| Platinum | 1139.9 | -0.1 | 0.0% | |
| Palladium | 795.7 | -1.3 | -0.2% | |
| Average PM | 0.0% | |||
| SHFE prices 06:48 BST | Change | % Change | |
| Cu | 45670 | -220 | -0.5% |
| AL | 13450 | -10 | -0.1% |
| Zn | 17020 | -120 | -0.7% |
| Pb | 13490 | 0 | 0.0% |
| Ni | 114260 | 2450 | 2.2% |
| Sn | 122360 | 1050 | 0.9% |
| Average change (base metals) | 0.3% | ||
| Rebar | 2305 | -19 | -0.8% |
| Au | 239.05 | 0.2 | 0.1% |
| Ag | 3582 | 16 | 0.4% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| All Day | EUR | Eurogroup Meetings | |||
| 12:00pm | GBP | Official Bank Rate | 0.50% | 0.50% | |
| 12:00pm | GBP | Asset Purchase Facility | 375B | 375B | |
| Tentative | GBP | MPC Rate Statement | |||
| 3:00pm | USD | Labor Market Conditions Index m/m | -0.3 |
The post Nickel continues to rebound, the rest consolidate appeared first on The Bullion Desk.
No comments:
Post a Comment