Precious metals were for the most part stronger yesterday with platinum leading the way with a 0.9 percent gain to $1,111, while gold and silver were up around 0.4 percent with the prices of gold at $1,192.90 – the weaker dollar that saw the dollar index drop to 95.97, helped sentiment. Palladium bucked the trend with a 0.6 percent drop to $765 – but super strong US auto sales should provide some support to palladium – US total vehicle sales data out late yesterday showed sales in May, annualised, were 17.8 million units (mu), better than the 17 mu expected and April’s reading of 16.5 mu – indeed it was the strongest data since August 2005.
We thought the base metals were looking a bit more supported yesterday morning on the back of generally firmer PMI data and for the most part that was true with copper, nickel, tin and zinc all firmer, while aluminium and lead were weaker. A weaker dollar helped underpin sentiment, but countering that, weak US factory orders were a negative.
Base metals prices are up an average of 0.2 percent this morning, nickel is off slightly, tin is up the most with a 0.5 percent gain, zinc is little changed, while the rest are up 0.3 percent, with copper at $6,057.50. Volume remains low with 3,166 lots – considering the weaker dollar we are surprised prices are not firmer.
Precious metals are quiet with most up just 0.1 percent with the price of gold at $1,193.70, while platinum is up 0.4 percent at $1,115, which puts platinum’s discount to gold at around $78.
In Shanghai, the base metals are mixed with nickel, lead and copper up, with nickel and copper up 0.5 percent with copper at Rmb 43,820, while the rest are lower by between 0.1 and 0.5 percent – see table below for more details. Spot copper in Changjiang is also up 0.5 percent at Rmb 43,950-44,050- the spread between spot and the August contract is at an equivalent of some $37/tonne and the LME/Shanghai copper arb ratio is at 1 to 7.23 – so the arb import window is closed.
Precious metals in Shanghai are weaker with the price of gold for December off 0.3 percent, while December silver is down 0.4 percent.
Equities – the Euro Stoxx 50 slipped 0.4 percent, the Dow closed down 0.2 percent and Asia is mixed this morning with the Nikkei off 0.4 percent, the Hang Seng is up 0.7 percent, the CSI 300 is down 1.2 percent and the Kospi is down 0.7 percent.
Currencies – the dollar index is slipping again, last at 95.69, the euro is firmer at 1.1184, helped by a 0.3 percent increase in CPI and with core CPI up 0.9 percent, the highest in nine months. In addition, there is a feeling that a new proposal from Greece’s creditors may shift the current deadlock. The weaker dollar saw strength in other currencies with sterling at 1.5367, the yen at 123.80, the aussie at 0.7800 and the rouble at 52.52, while the yuan is at 6.1964.
The economic agenda is busy – data out already showed Australian GDP rise to 0.9 percent from 0.5 percent, China’s HSBC Services PMI climbed to 53.5 from 52.9. Later we get UK HPI, services PMI data out across Europe and the US, Italian and EU unemployment data, EU retail sales, EU interest rate decision and press conference, US ADP non-farm employment change, trade balance, crude oil inventories and the Beige book. In addition, FOMC Charles Evans is speaking at 7:15 pm BST – see table below for more details.
The base metals look mixed, copper is trying to rebound having breached support levels around $6,000, nickel is in the same boat, while the rest look troubled. Considering the dollar is weaker and overall recent economic data has not been too bad, perhaps even supportive, it is somewhat surprising that the base metals complex as a whole is not looking stronger – this if anything suggests sentiment remains weak overall. As such, we would expect rallies to be sat on.
The precious metals are looking mixed, with palladium heading lower, on the one hand palladium has held up well so may have some catching up to do on the downside, but on the other hand it has generally stayed up the well as it has the strongest fundamentals and yesterday’s US vehicle sales support that. Platinum looks oversold, but the weaker dollar seems to be providing some support, while gold and silver are also getting some support from the weaker dollar, but they still look vulnerable. With bonds selling off and the dollar weaker, the price of gold may manage to work higher, but overall sentiment in bullion remains depressed and there seems a lack of will from investors to get involved and while that remains the case a retest support around $1,180 cannot be ruled out. We feel it would take either a meaningful correction in equities/bonds, or a deterioration in the Greek situation to change that.
| Overnight Performance | ||||
| BST | 06:04 | +/- | +/- % | Lots |
| Cu | 6057.5 | 17 | 0.3% | 1993 |
| Al | 1748.5 | 4.5 | 0.3% | 428 |
| Ni | 12995 | -10 | -0.1% | 284 |
| Zn | 2162 | -1 | 0.0% | 358 |
| Pb | 1932 | 5 | 0.3% | 101 |
| Sn | 15570 | 70 | 0.5% | 2 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | 0.2% | 3,166 | ||
| Gold | 1193.7 | 0.8 | 0.1% | |
| Silver | 16.79 | 0.01 | 0.1% | |
| Platinum | 1115 | 4 | 0.4% | |
| Palladium | 765.6 | 0.6 | 0.1% | |
| Average PM | 0.1% | |||
| SHFE Prices 06:24 BST | Change | % Change | |
| Cu | 43820 | 210 | 0.5% |
| AL | 13165 | -10 | -0.1% |
| Zn | 16450 | -80 | -0.5% |
| Pb | 13255 | 20 | 0.2% |
| Ni | 99610 | 530 | 0.5% |
| Sn | 116180 | -230 | -0.2% |
| Average change (base metals) | 0.1% | ||
| Rebar | 2365 | -6 | -0.3% |
| Au | 241.25 | -0.7 | -0.3% |
| Ag | 3675 | -15 | -0.4% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:01am | GBP | BRC Shop Price Index y/y | -1.9% | -1.9% | |
| 2:30am | Aus | GDP q/q | 0.9% | 0.7% | 0.5% |
| 2:45am | China | HSBC Services PMI | 53.5 | 53.3 | 52.9 |
| 7:00am | UK | Nationwide HPI m/m | 0.4% | 1.0% | |
| 8:15am | Spain | Spanish Services PMI | 59.5 | 60.3 | |
| 8:45am | Italy | Italian Services PMI | 52.8 | 53.1 | |
| 8:50am | France | French Final Services PMI | 51.6 | 51.6 | |
| 8:55am | Germany | German Final Services PMI | 52.9 | 52.9 | |
| 9:00am | EU | Final Services PMI | 53.3 | 53.3 | |
| 9:00am | Italy | Italian Monthly Unemployment Rate | 12.8% | 13.0% | |
| 9:00am | Italy | Italian Quarterly Unemployment Rate | 12.9% | 13.0% | |
| 9:30am | UK | Services PMI | 59.2 | 59.5 | |
| 10:00am | EU | Retail Sales m/m | 0.7% | -0.8% | |
| 10:00am | EU | Unemployment Rate | 11.2% | 11.3% | |
| 12:45pm | EU | Minimum Bid Rate | 0.1% | 0.1% | |
| 1:15pm | Us | ADP Non-Farm Employment Change | 198K | 169K | |
| 1:30pm | EU | ECB Press Conference | |||
| 1:30pm | US | Trade Balance | -43.9B | -51.4B | |
| 2:45pm | US | Final Services PMI | 56.5 | 56.4 | |
| 3:00pm | US | ISM Non-Manufacturing PMI | 57.1 | 57.8 | |
| 3:30pm | US | Crude Oil Inventories | -1.9M | -2.8M | |
| 7:00pm | US | Beige Book | |||
| 7:15pm | US | FOMC Member Evans Speaks | |||
The post Gold price treads water, weaker dollar helps, but not much appeared first on The Bullion Desk.
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