The base metals managed to push higher on Tuesday, but struggled to hold on to most of the gains as prices closed up just 0.2 percent on average, with tin off 0.8 percent, while lead and zinc were up around one percent and the rest were little changed with copper at $5,967.
Precious metals ended mixed yesterday with platinum up 0.5 percent at $1,106, palladium was off 0.4 percent at $739, gold was up 0.3 percent at $1,176.70 and silver was up 0.1 percent at $15.95. Earlier in the day the complex had been stronger as at the day’s highs prices were up an average of 1.4 percent. Once again the precious metals have struggled to hold on to gains even though the dollar was weaker.
This morning, the base metals are up 0.4 percent on average helped by a weaker dollar that has the dollar index at 94.83. Tin leads on the upside with a 0.6 percent gain to $15,350, aluminium is up 0.5 percent at $1,759, nickel and lead are up 0.4 percent, copper is up 0.3 percent at $5,985.50 and zinc is up 0.2 percent. Volume remains extremely light at 1,626 tonnes – the sort of volume seen when China is on holiday.
Silver and palladium prices are up 0.8 percent this morning, platinum is up 0.7 percent and gold is up 0.3 percent at $1,180.50. A weaker dollar seems to be underpinning this firmer tone.
In Shanghai, the base metals are mixed with zinc up 0.5 percent, lead and copper are up 0.3 percent, with copper at Rmb 43,330, while tin and nickel are off an average of 0.3 percent. Spot copper in Changjiang is up 0.2 percent at Rmb 43,500-43,600, the backwardation with the futures is at an equivalent of $44 per tonne and the LME/Shanghai copper arb is at 1 to 7.24.
Precious metals in China are little changed with gold up 0.2 percent and silver up 0.1 percent.
Equities – Greek issues and weaker bonds seem to be dampening sentiment in Europe where the Euro Stoxx 50 was off 0.3 percent yesterday, while the Dow was little changed. Asia is for the most part upbeat with the Nikkei up 0.3 percent even though the yen is firmer, the Hang Seng is up 0.2 percent, the CSI 300 is up 0.1 percent, but the Kospi is off 0.6 percent.
Currencies – the dollar is pointing lower, last at 94.83, the euro is firmer at 1.1303, as is the yen at 122.70 as BoJ Governor Haruhiko Kuroda said it is hard to see the yen falling more. Other currencies are firmer too with sterling at 1.5415, the aussie at 0.7734, the rouble at 55.16 and emerging market currencies have turned higher after recent weakness. The yuan is little changed at 6.2047.
Economic data showed Japan’s core machinery orders rise 3.8 percent, while PPI dropped 2.1 percent. Later we get French, Italian and UK industrial production, UK manufacturing production. UK GDP estimate and US crude oil inventory and Federal budget balance data. In addition, UK Bank of England Governor Mark Carney is speaking at 9pm – see table below for more details.
The base metals are once again attempting to head higher but as we saw yesterday the higher prices are also attracting selling so we expect the upside to remain a struggle. Even nickel that has been the strongest of the complex is attracting scale up selling, but the dips continue to be bought. For now the weaker dollar may well underpin further gains, but we would not get too comfortable with the rebounds.
Gold is rebounding after Friday’s spike lower, platinum is following, silver has for now stopped falling, but is not rising much, as seen by the rising gold/silver ratio and palladium remains under pressure, but oversold. Given the stalemate over Greece, the potential for other asset classes to correct and the weaker dollar, we are mildly bullish for gold and would be prepared to get even more bullish if it starts to gain momentum.
| Overnight Performance | ||||
| BST | 06:36 | +/- | +/- % | Lots |
| Cu | 5985.5 | 18.5 | 0.3% | 658 |
| Al | 1759 | 9.5 | 0.5% | 223 |
| Ni | 13430 | 60 | 0.4% | 361 |
| Zn | 2168 | 5 | 0.2% | 249 |
| Pb | 1937 | 8.5 | 0.4% | 102 |
| Sn | 15350 | 95 | 0.6% | 33 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | 0.4% | 1,626 | ||
| Gold | 1180.5 | 3.8 | 0.3% | |
| Silver | 16.08 | 0.13 | 0.8% | |
| Platinum | 1114 | 8 | 0.7% | |
| Palladium | 744.7 | 5.7 | 0.8% | |
| Average PM | 0.7% | |||
| SHFE Prices 06:51 BST | Change | % Change | |
| Cu | 43330 | 130 | 0.3% |
| AL | 12945 | -5 | 0.0% |
| Zn | 16405 | 75 | 0.5% |
| Pb | 13225 | 35 | 0.3% |
| Ni | 101080 | -370 | -0.4% |
| Sn | 114850 | -260 | -0.2% |
| Average change (base metals) | 0.1% | ||
| Rebar | 2342 | -2 | -0.1% |
| Au | 238.3 | 0.4 | 0.2% |
| Ag | 3559 | -5 | -0.1% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 2:50am | Japan | Core Machinery Orders m/m | 3.8% | -2.0% | 2.9% |
| 2:50am | Japan | PPI y/y | -2.1% | -2.2% | -2.1% |
| 7:45am | France | French Industrial Production m/m | 0.4% | -0.3% | |
| 9:00am | Italy | Italian Industrial Production m/m | 0.3% | 0.4% | |
| 9:30am | UK | Manufacturing Production m/m | 0.1% | 0.4% | |
| 9:30am | UK | Industrial Production m/m | 0.1% | 0.5% | |
| 3:00pm | UK | NIESR GDP Estimate | 0.4% | ||
| 3:30pm | US | Crude Oil Inventories | -1.5M | -1.9M | |
| 6:01pm | US | 10-y Bond Auction | 2.24|2.7 | ||
| 7:00pm | US | Federal Budget Balance | -97.4B | 156.7B | |
| 9:00pm | UK | BOE Gov Carney Speaks | |||
The post Weaker dollar helps underpin firmer metal prices appeared first on The Bullion Desk.
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