Base metals pushed higher yesterday as there was some progress on Greece and the dollar eased further. The metals closed up an average of 0.5 percent – at the day’s highs they were up an average of 1.6 percent. Copper led the way with a 1.1 percent rise to close at $6,030.50.
Precious metals were firmer on the back of the weaker dollar yesterday, what is surprising is that the progress made over Greece was not taken as a negative. The gold price closed up 0.8 percent at $1,185.70, silver, platinum and palladium were up around 0.4 percent.
This morning the base metals are little changed with average gains of 0.1 percent with no metals in negative territory – so it seems as though the market is consolidating in quiet trade – volume remains light at 1,727 lots.
Precious metals are firmer this morning by an average of 0.2 percent with the gold price at $1,186.40 and platinum at $1,115.40 – it’s discount to gold remains around the $71 level.
In Shanghai, the base metals are mixed, copper is up 0.6 percent at Rmb 43,620, nickel is up 0.5 percent, tin and lead are slightly firmer, while zinc is off 0.6 percent and aluminium is off 0.3 percent. Spot copper in Changjiang is up 0.8 percent at Rmb 43,800-43,930, the backwardations with the futures is at an equivalent of $50 per tonne and the LME/Shanghai coper arb window remains closed with the ratio at 1 to 7.23.
The December gold price in Shanghai is up 0.6 percent, silver is unchanged.
Equities – got a boost yesterday as there was some progress on Greece, whether it can be built on remains to be seen. The Euro Stoxx 50 climbed two percent, the Dow closed up 1.3 percent and Asia is for the most part stronger with the Nikkei up 1.5 percent, the Hang Seng is up 0.9 percent, the Kospi is up 0.3 percent, but the CSI is unchanged after recent gyrations.
Currencies – the dollar index’s weaker move is consolidating, last at 94.80 and consolidation after some strength seems to be the order of the day amongst the currencies with the euro at 1.1300, the yen at 123.20, sterling at 1.5485, the aussie at 0.7755 and the rouble at 54.00, while the yuan is weaker at 6.2065.
Economic data out already shows disappointing Japanese manufacturing data, China’s data was mixed with industrial production and retail sales slightly better, albeit showing relatively low growth, for China, while the slowdown fixed asset investment is accelerating. French non-farm payrolls were unchanged. Later we get French CPI and US data includes: retail sales, initial jobless claims, import prices, business inventories, natural gas storage and there are 30 year bond auctions in the UK and US – see table below for more details.
The base metals’ rebounds seem to have run into scale up selling, we have thought the rallies would struggle on the upside and that seems to be the case, especially in lead and zinc. The exceptions are tin and nickel, with the former holding up well and the latter continue to edge higher. Copper and aluminium are only just starting to show some weakness – we should get some idea how strong underlying support is by seeing how quickly support is found, or not as the case may be.
The gold price is holding up well, last around $1,185, as it continues its rebound after last Friday’s spike down, platinum is following suit, while silver and palladium are treading water near recent lows, with silver just holding above the support line joining up the three previous troughs from November, March and April. Given a weaker dollar and the Greek situation, we would expect these low gold prices to attract some safe-haven interest – although it may take deeper corrections in bonds, or equities, or an escalation over Greece to fuel that.
| Overnight Performance | ||||
| BST | 06:24 | +/- | +/- % | Lots |
| Cu | 6034 | 3.5 | 0.1% | 553 |
| Al | 1762.5 | 3.5 | 0.2% | 298 |
| Ni | 13545 | 15 | 0.1% | 337 |
| Zn | 2151.5 | 5 | 0.2% | 393 |
| Pb | 1929.5 | 5 | 0.3% | 144 |
| Sn | 15400 | 0 | 0.0% | 2 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | 0.1% | 1,727 | ||
| Gold | 1186.4 | 0.7 | 0.1% | |
| Silver | 16.04 | 0.03 | 0.2% | |
| Platinum | 1115.4 | 3.4 | 0.3% | |
| Palladium | 742.6 | 0.6 | 0.1% | |
| Average PM | 0.2% | |||
| SHFE Prices 06:25 BST | Change | % Change | |
| Cu | 43620 | 250 | 0.6% |
| AL | 12910 | -40 | -0.3% |
| Zn | 16325 | -100 | -0.6% |
| Pb | 13230 | 10 | 0.1% |
| Ni | 101730 | 480 | 0.5% |
| Sn | 115470 | 270 | 0.2% |
| Average change (base metals) | 0.1% | ||
| Rebar | 2347 | 7 | 0.3% |
| Au | 240.3 | 1.5 | 0.6% |
| Ag | 3569 | 0 | 0.0% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:01am | UK Japan | RICS House Price Balance | 34.0% | 35.0% | 32.0% |
| 12:50am | Japan | BSI Manufacturing Index | -6 | 3.2 | 2.4 |
| 6:30am | China | Industrial Production y/y | 6.1% | 6.0% | 5.9% |
| 6:30am | China | Fixed Asset Investment ytd/y | 11.4% | 12.0% | |
| 6:30am | China | Retail Sales y/y | 10.1% | 10.1% | 10.0% |
| 6:30am | France | French Final Non-Farm Payrolls q/q | 0.0% | -0.1% | -0.1% |
| 7:45am | France | French CPI m/m | 0.3% | 0.1% | |
| Tentative | UK Japan | 30-y Bond Auction | 2.34|1.4 | ||
| 1:30pm | US | Core Retail Sales m/m | 0.7% | 0.1% | |
| 1:30pm | US | Retail Sales m/m | 1.1% | 0.0% | |
| 1:30pm | US | Unemployment Claims | 277K | 276K | |
| 1:30pm | US | Import Prices m/m | 0.9% | -0.3% | |
| 3:00pm | US | Business Inventories m/m | 0.2% | 0.1% | |
| 3:30pm | US | Natural Gas Storage | 114B | 132B | |
| 6:01pm | US | 30-y Bond Auction | 3.04|2.2 | ||
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