Precious metals were mixed, gold and palladium were off slightly with gold at $1,175, while platinum climbed 0.7 percent to $1,073 and silver was up 0.4 percent at $15.88.
The base metals started Wednesday on a firm note following Tuesday’s gains, but once again struggled to build on those gains, with the metals closing down an average 0.4 percent. Copper bucked the trend with a 0.3 percent rise to $5,769.50, while the rest were down between 0.2 percent on lead and 0.9 percent on nickel. Renewed concerns over Greece seemed to overshadow the better economic news of late.
This morning the base metals are mixed but seem to be consolidating, tin is off 0.5 percent at $15,120, the rest are either little changed or up between 0.1 and 0.4 percent with nickel rebounding the most, it is last at $12,785. Volume remains light at 2,429 lots as of 06:14 BST, nickel once again has seen more lots traded than copper – see table below.
Precious metals are up an average of 0.5 percent with the PGMs leading the way, with gains of around 0.6 percent, while silver is up 0.4 percent at $15.95 and gold up 0.2 percent at $1,177.50. The firmer trend has been supported by the impasse over Greece.
In Shanghai, the base metals are for the most part lower, led by a 1.4 percent fall in tin, with nickel off 0.5 percent and zinc, aluminium and copper off 0.2 percent with copper at Rmb 41,960. Spot copper in Changjiang is off 0.1 percent at Rmb 42,250-42,400, the backwardation with the futures is at an equivalent of $70 per tonne and the LME/Shanghai copper arb ratio is at 1 to 7.27 for the September contract, while the arb window is closer to being open for the July contract with the arb ratio at 1 to 7.36 – this may start to lend LME copper some support.
December gold and silver in Shanghai are little changed with gold at Rmb 238.35 and silver at Rmb 3,506.
Equities – Greek jitters led to a 0.4 percent correction in the Euro Stoxx 50, the Dow was off one percent yesterday and this morning Asia is generally weaker with the Nikkei down 0.2 percent, the Hang Seng is off 0.4 percent, while the Kospi and CSI 300 are up 0.1 percent.
Currencies – the dollar is flat at 95.29, the euro is at 1.1198, sterling is drifting, last at 1.5686, as is the rouble at 53.84, the yen is firmer at 123.59, the aussie is flat at 0.7738, as is the yuan at 6.2060. Currencies are therefore not providing guide as to the markets’ views.
The economic agenda will be focused on Greece, data out includes: German GfK consumer climate, UK CBI realised sales, US initial jobless claims, personal income, spending and personal consumption expenditures (PCE) price index, flash services PMI and natural gas storage data. In addition, FOMC members Daniel Tarullo and Jerome Powell are speaking – see table below for more details.
Our view on the base metals turned more bullish following the better PMI data out earlier in the week, but it does look as though uncertainty over Greece is weighing on sentiment. We would have thought the better revision to US GDP data yesterday would have also lent support. While we would not give up on the base metals running higher in the short term, the fact the market is not taking advantage of the tailwind that the PMI data has provided is a bit of a worry. We will see whether the pullback in prices now attracts buying – if not then it will look as though the path of least resistance remains to the downside.
Gold prices pulled back earlier in the week as it looked as though progress was being made over Greece, but with progress now not being made, the slide in gold has halted and we would not be surprised if buying returned. The market still, however, seems very complacent that a deal, even if it is just a short term fix, will be made, but as deadlines/ defaults approach and the impasse remains then the markets may get more jittery again. So for now we favour the upside, especially as gold still does seem to be seeing good underlying support in the $1,160-1,170 area. Silver has breached its support line, but is not yet seeing follow through weakness. The PGMs remain weak and oversold, with platinum’s discount to gold at around $95.
| Overnight Performance | ||||
| BST | 06:14 | +/- | +/- % | Lots |
| Cu | 5768.5 | -1 | 0.0% | 708 |
| Al | 1716.5 | 2.5 | 0.1% | 113 |
| Ni | 12785 | 45 | 0.4% | 833 |
| Zn | 2046.5 | 1.5 | 0.1% | 596 |
| Pb | 1796 | 5 | 0.3% | 172 |
| Sn | 15120 | -80 | -0.5% | 7 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | 0.1% | 2,429 | ||
| Gold | 1177.5 | 2.5 | 0.2% | |
| Silver | 15.95 | 0.07 | 0.4% | |
| Platinum | 1079 | 6 | 0.6% | |
| Palladium | 697.7 | 4.7 | 0.7% | |
| Average PM | 0.5% | |||
| SHFE Prices 06:27 BST | Change | % Change | |
| Cu | 41960 | -70 | -0.2% |
| AL | 12770 | -25 | -0.2% |
| Zn | 15690 | -25 | -0.2% |
| Pb | 13190 | 30 | 0.2% |
| Ni | 95460 | -520 | -0.5% |
| Sn | 111930 | -1610 | -1.4% |
| Average change (base metals) | -0.4% | ||
| Rebar | 2230 | -9 | -0.4% |
| Au | 238.35 | -0.05 | 0.0% |
| Ag | 3506 | 4 | 0.1% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 7:00am | Germany | GfK German Consumer Climate | 10.1 | 10.1 | 10.2 |
| 11:00am | UK | CBI Realized Sales | 32 | 51 | |
| Day 1 | EU | EU Economic Summit | |||
| 1:00pm | US | FOMC Member Tarullo Speaks | |||
| 1:30pm | US | Unemployment Claims | 271K | 267K | |
| 1:30pm | US | Core PCE Price Index m/m | 0.1% | 0.1% | |
| 1:30pm | US | Personal Spending m/m | 0.7% | 0.0% | |
| 1:30pm | US | Personal Income m/m | 0.6% | 0.4% | |
| 1:30pm | US | FOMC Member Powell Speaks | |||
| 2:45pm | US | Flash Services PMI | 56.5 | 56.2 | |
| 3:30pm | US | Natural Gas Storage | 79B | 89B | |
The post Gold edges higher as Greek talks stall appeared first on The Bullion Desk.
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