Metals started Friday on a mixed note, but generally in consolidation mode after Thursday’s weakness, but as the day progressed the market became more bearish with copper leading the decline with a 1.4 percent drop to $5,666.50, tin bucked the trend by treading water after its strong gains on Thursday, while aluminium, nickel and zinc were off 0.5 percent and lead was off 1.1 percent. The weakness was seen despite a generally weak dollar.
Precious metals were mixed with platinum up 0.5 percent to $1,083, palladium was down 1.7 percent at $705, silver was off 0.7 percent at $16.07 and the gold price was off 0.1 percent at $1,200. Gold made several attempts to run higher and seemed to be picking up some safe-haven interest over Greece, while silver struggled.
This morning the market is focused on a new proposal offered by Greek Prime Minister Tsipras, which will be discussed at today’s EU emergency meeting, but trading in the metals has been particularly quiet as China is closed for a holiday. The base metals are mixed with average losses of 0.2 percent, with tin, lead and zinc off an average of 0.5 percent, while nickel is up 0.3 percent at $12,690, aluminium is little changed and copper is up 0.2 percent at $5,675.50. Volume is particularly light with just 800 lots traded by 6am BST.
Precious metals are also mixed with platinum off 0.3 percent at $1,079.50, palladium and silver are up 0.2 percent at $706.10 and $16.11 respectively, while gold is little changed at $1,199.
Equities – The Euro Stoxx 50 closed up 0.2 percent while the Dow closed off 0.6 percent on Friday and this morning equities are more upbeat in Asia with the Nikkei up 0.9 percent, the Hang Seng is up 0.4 percent, as is the Kospi and pre-market Dax is up around 0.6 percent.
Currencies – with the euro up at 1.1394 it does not look as though traders are too worried about Greece, the dollar index is weaker at 93.88 and the currencies are generally firmer with sterling at 1.5900, the yen at 122.74, the aussie is at 0.7783, the rouble is at 54.20 and the yuan is at 6.2085. This suggests last week’s FOMC stance is the main driver in the currencies for now.
The economic agenda will be focused on Greece and the Eurogroup meeting; there is also a Bank of Japan monthly report, EU consumer confidence and US existing home sales. UK’s Monetary Policy Committee member Sir Jon Cunliffe is talking – see table for more details.
The base metals remain under pressure and the main driving force on that seems to be continuing weakness in China. Tomorrow’s flash PMI manufacturing data out in China will be closely watched. Copper has now given back 73 percent of its January to May gains, the other metals that rallied strongly, namely lead and zinc, have given back 79 and 85 percent of their gains. For now, tin is looking the strongest of the base metals, nickel is treading water, while the rest are all entrenched in downward trends and that seems to be the path of least resistance, even if some are now looking oversold again. The weaker dollar may start to encourage some consumer buying, but we doubt consumers will feel any strong need to chase prices higher unless we start to see positive signs out of China.
The precious metals are very mixed with palladium prices falling like a knife, platinum is weak, but finding some support, as is silver, while gold is trying to work higher, but is encountering resistance above $1,200. The danger is a Greek deal leads to another wave of long liquidation, conversely if the market has been too complacent over Greece, a move in the gold price above $1,210 could start to trigger short-covering.
| Overnight Performance | ||||
| BST | 05:57 | +/- | +/- % | Lots |
| Cu | 5675.5 | 9 | 0.2% | 389 |
| Al | 1695 | -0.5 | 0.0% | 136 |
| Ni | 12690 | 35 | 0.3% | 50 |
| Zn | 2048.5 | -9.5 | -0.5% | 156 |
| Pb | 1781 | -7 | -0.4% | 59 |
| Sn | 15220 | -90 | -0.6% | 10 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | -0.2% | 800 | ||
| Gold | 1199 | -1 | -0.1% | |
| Silver | 16.11 | 0.04 | 0.2% | |
| Platinum | 1079.5 | -3.5 | -0.3% | |
| Palladium | 706.1 | 1.1 | 0.2% | |
| Average PM | 0.0% | |||
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| All Day | China | Bank Holiday | |||
| 6:00am | Japan | BOJ Monthly Report | |||
| 8:45am | UK | MPC Member Cunliffe Speaks | |||
| All Day | EU | Eurogroup Meetings | |||
| All Day | EU | Euro Summit | |||
| 3:00pm | EU | Consumer Confidence | -6 | -6 | |
| 3:00pm | US | Existing Home Sales | 5.27M | 5.04M | |
The post Metals weak but quiet ahead of Tuesday’s flash PMI data appeared first on The Bullion Desk.
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