Precious metals were weaker on Friday they closed down an average of 0.2 percent, silver spiked down 2.1 percent at one stage to $15.54, but that was soon reversed, but it still closed off 0.6 percent at $15.78. Gold reached a high of $1,179, a low of 1,168.70 and closed up 0.1 percent at $1,175.
The base metals put in a mixed performance on Friday – at the day’s highs prices were up an average of 0.7 percent, at the day’s lows they were down one percent on average, they closed down 0.6 percent, with nickel down 2.2 percent, aluminium and lead were down 0.9 percent, while copper closed up 0.6 percent at $5,792.50.
This morning, gold and silver are up on safe-haven buying after Greece called a referendum and the Chinese equity market continues to correct sharply. Gold is up 0.8 percent at $1,183.90, silver is up one percent at $15.93, while the PGMs are off 0.6 percent. Considering the drama, especially in Europe, it is still surprising that gold is not attracting more interest.
The base metals are down this morning by an average of 0.7 percent as the uncertainty over Greece and in China weighs on sentiment, with nickel continuing to fall heavily; it is down 2.3 percent at $12,155, which is a fresh low for the year and the lowest since May 2009. Aluminium, lead, zinc and tin, are down between 0.4 and 0.7 percent, while copper is off just 0.1 percent at $5,789. Volume on the LME is very high at 9,900, with high volumes seen in copper, nickel and zinc.
In Shanghai, the base metals are off an average of 0.7 percent, with nickel down 3.5 percent, zinc is off 0.7 percent, lead is off 0.5 percent, tin is down 0.3 percent, while aluminium is unchanged and copper is up 0.7 percent at Rmb 42,300. Spot copper in Changjiang is up 0.5 percent at Rmb 42,600-42,750, the backwardation with the futures is at an equivalent to $72 per tonne and the LME/Shanghai copper arb ratio is at 1 to 7.36 for July, which is getting close to reopening the arb window.
Equities – the Euro Stoxx 50 and Dow were up around 0.3 percent on Friday, but Asia is weaker on the back of Greece and the correction in China, with the CSI 300 now off 2.1 percent, despite an interest rate cut over the weekend. The Nikkei is down 2.7 percent, the Hang Seng is down 2.3 percent and the Kospi is off 1.4 percent. Indications are that European equities will open down around 4.5 percent.
Currencies – the dollar index has gapped higher on safe-haven concerns – it has been up to 96.39, but is last at 96.00, the euro dropped to a low of 1.0967, last at 1.1037, sterling is little changed at 1.5723, the yen is stronger at 122.66, the aussie is at 0.7648, the yuan is weaker at 6.2095, as is the rouble at 55.26.
The economic agenda is fairly busy but is likely to be overshadowed by how the markets react to Greece. Data out already shows Japan’s retail sales climbed 3 percent, but industrial production fell 2.2 percent. Later we get German and Spanish CPI, UK lending data and US pending home sales – see table below for more details.
Gold prices gapped higher in early trading, but prices are already drifting lower, the same is true for silver and the PGMs. The fact all precious metals prices are relatively weak and are struggling to hold on to early gains, highlights that gold remains out of favour with investors and physical demand for precious metals is weak. This does not bode well for firmer prices, which we remain surprised about. The pullback in Chinese equities might lead to some money moving back into precious metals, although that might be a secondary reaction for the days and weeks ahead.
The base metals are for the most part looking weak and given the uncertainty over Greece that is not surprising, but copper is bucking the trend and is trying to push higher. Clearance of resistance around $5,830, would suggest a rally is getting underway. Falling copper stocks in China and a possible opening of the arb window may well provide support for LME prices.
| Overnight Performance | ||||
| BST | 06:58 | +/- | +/- % | Lots |
| Cu | 5789 | -3.5 | -0.1% | 4494 |
| Al | 1699 | -8 | -0.5% | 889 |
| Ni | 12155 | -280 | -2.3% | 2916 |
| Zn | 2019 | -8 | -0.4% | 1187 |
| Pb | 1768.5 | -12 | -0.7% | 397 |
| Sn | 14780 | -95 | -0.6% | 17 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | -0.7% | 9,900 | ||
| Gold | 1183.9 | 8.9 | 0.8% | |
| Silver | 15.93 | 0.15 | 1.0% | |
| Platinum | 1073 | -5 | -0.5% | |
| Palladium | 671.5 | -4.5 | -0.7% | |
| Average PM | 0.1% | |||
| SHFE Prices 06:58 BST | Change | % Change | |
| Cu | 42300 | 290 | 0.7% |
| AL | 12745 | -5 | 0.0% |
| Zn | 15515 | -115 | -0.7% |
| Pb | 13040 | -60 | -0.5% |
| Ni | 90910 | -3320 | -3.5% |
| Sn | 111940 | -350 | -0.3% |
| Average change (base metals) | -0.7% | ||
| Rebar | 2210 | -11 | -0.5% |
| Au | 239.3 | 1.6 | 0.7% |
| Ag | 3484 | -1 | 0.0% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:50am | Japan | Retail Sales y/y | 3.0% | 2.1% | 4.9% |
| 12:50am | Japan | Prelim Industrial Production m/m | -2.2% | -0.8% | 1.2% |
| All Day | Italy | Italian Bank Holiday | |||
| All Day | Germany | German Prelim CPI m/m | 0.1% | 0.1% | |
| 8:00am | Spain | Spanish Flash CPI y/y | -0.1% | -0.2% | |
| 9:30am | UK | Net Lending to Individuals m/m | 3.3B | 2.9B | |
| 9:30am | UK | M4 Money Supply m/m | 0.5% | 0.4% | |
| 9:30am | UK | Mortgage Approvals | 69K | 68K | |
| 3:00pm | US | Pending Home Sales m/m | 1.3% | 3.4% | |
The post Gold gaps higher on Greece, base metals generally weaker appeared first on The Bullion Desk.
No comments:
Post a Comment