Precious metals put in a choppy day yesterday– with time running out for Greece, the gold market is looking surprisingly calm, which suggests a huge amount of complacency for an 11th-hour agreement – the Greek saga was probably never going to get an early solution so over the next two weeks, or so, we will see if markets start to get more nervous. Gold closed off 0.3 percent at $1,181.50.
Base metals were weak yesterday with average losses of 1.2 percent, at the day’s lows average losses had been 1.5 percent. Nickel led the decline with a 1.9 percent fall to $12,690, tin was off 1.5 percent and copper closed off 1.3 percent at $5,740.
This morning the base metals are mixed with tin up 0.5 percent, lead up 0.3 percent and copper up 0.2 percent at $5,759, while the rest are off slightly. Volume remains light with 2,613 lots traded.
Precious metals are off 0.2 percent on average this morning with the PGMs off 0.2 percent and gold and silver prices off 0.1 percent with gold at $1,180.30. For now, while many of the metals both base and precious have been setting fresh lows, gold is at least holding up relatively well.
In Shanghai, the base metals are off an average of 0.5 percent, led by a 1.8 percent drop in nickel, copper is off 0.9 percent at Rmb 41,800, as prices caught up with yesterday’s activity on the LME. Aluminium and lead are up between 0.1 and 0.2 percent, while zinc is off 0.2 percent and tin is off 0.4 percent.
Spot copper in Changjiang is down 0.9 percent at Rmb 42,050-42,250, the backwardation has widened out to $72 per tonne, while the LME/Shanghai copper arb ratio is at 1 to 7.26.
Gold and silver in Shanghai are weaker by around 0.5 percent.
Equities managed to shake off Greek concerns yesterday with the Euro Stoxx 50 closing up 0.5 percent and the Dow was up 0.6 percent. Asia this morning is mixed with the Nikkei off 0.6 percent, the Hang Seng is up 0.4 percent, the CSI 300 is down 1.3 percent and the Kospi is up 0.3 percent. This suggests some consolidation ahead of the FOMC statement this evening.
Currencies – the dollar is flat-lined ahead of the FOMC economic projections and statement, it is last at 94.93, the euro is also flat at 1.1256, as is the aussie at 0.7723, sterling is firmer at 1.5642, as is the rouble at 53.75, the yen is at 123.55 and the yuan is weaker at 6.2085.
The economic agenda is busy with Italian trade balance, UK employment reports, the UK’s monetary policy committee’s voting record, EU CPI, US crude oil inventories and the FOMC’s rate decision, projections and statement, at 7pm BST and the press conference at 7:30 BST – see table below for more details.
The base metals are bearish with most setting fresh lows for this latest pullback on a regular basis, there is dip buying along the way, but the selling dominates. The base metals have now given back between 64 and 122 percent of the March-May gains, with copper giving back the least and aluminium extending below the March lows. Sentiment is bearish on China and on global growth generally. For now, we would run with the pullbacks, but would expect some metals to start to run into support before too long as either weaker prices, or stock movements start to firm up the fundamentals – aluminium, tin, lead and perhaps nickel are likely contenders.
The precious metals are quite mixed with the PGMs bearish, but oversold in our view, silver is on a knife-edge holding around the support line joining the December, March and April troughs, while gold is holding up relatively well – the latter no doubt on the back of Greece, but given the seriousness of the Greek situation and the fact gold can only tread water at a low level, does highlight how weak sentiment generally is for gold. Should an 11th hour agreement be found on Greece then gold could catch-up with the likes of platinum.
| Overnight Performance | ||||
| BST | 06:04 | +/- | +/- % | Lots |
| Cu | 5759 | 9 | 0.2% | 1222 |
| Al | 1703 | -1 | -0.1% | 320 |
| Ni | 12680 | -10 | -0.1% | 329 |
| Zn | 2091.5 | -3.5 | -0.2% | 507 |
| Pb | 1803 | 5 | 0.3% | 233 |
| Sn | 14685 | 75 | 0.5% | 2 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | 0.1% | 2,613 | ||
| Gold | 1180.3 | -1.2 | -0.1% | |
| Silver | 15.98 | -0.02 | -0.1% | |
| Platinum | 1075.9 | -2.1 | -0.2% | |
| Palladium | 729.6 | -1.4 | -0.2% | |
| Average PM | -0.2% | |||
| SHFE Prices 06:04 BST | Change | % Change | |
| Cu | 41800 | -370 | -0.9% |
| AL | 12710 | 25 | 0.2% |
| Zn | 16055 | -40 | -0.2% |
| Pb | 12740 | 10 | 0.1% |
| Ni | 95230 | -1730 | -1.8% |
| Sn | 111830 | -410 | -0.4% |
| Average change (base metals) | -0.5% | ||
| Rebar | 2229 | -37 | -1.6% |
| Au | 238.7 | -1.3 | -0.5% |
| Ag | 3548 | -20 | -0.6% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:50am | Japan | Trade Balance | -0.18T | -0.17T | -0.24T |
| 9:00am | Italy | Italian Trade Balance | 3.27B | 4.06B | |
| 9:30am | UK | Average Earnings Index 3m/y | 2.5% | 1.9% | |
| 9:30am | UK | Claimant Count Change | -12.5K | -6.5K | |
| 9:30am | UK | MPC Official Bank Rate Votes | 0-0-9 | 0-0-9 | |
| 9:30am | UK | MPC Asset Purchase Facility Votes | 0-0-9 | 0-0-9 | |
| 9:30am | UK | Unemployment Rate | 5.5% | 5.5% | |
| 10:00am | EU | Final CPI y/y | 0.3% | 0.3% | |
| 10:00am | EU | Final Core CPI y/y | 0.9% | 0.9% | |
| Tentative | Germany | German 10-y Bond Auction | 0.65|1.3 | ||
| 3:30pm | US | Crude Oil Inventories | -1.6M | -6.8M | |
| 6:30pm | UK | MPC Member Forbes Speaks | |||
| 6:45pm | UK | BOE Gov Carney Speaks | |||
| 7:00pm | US | FOMC Economic Projections | |||
| 7:00pm | US | FOMC Statement | |||
| 7:00pm | US | Federal Funds Rate | <0.25% | <0.25% | |
| 7:30pm | US | FOMC Press Conference | |||
The post Gold treads water, other metals remain weak, some oversold appeared first on The Bullion Desk.
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