Greece Parliament voted for the austerity package. Bullion prices fell 1.2 percent yesterday, while base metals were mixed and China’s stock market is up 3.5 percent as of 06:30 BST.
This morning the base metals are consolidating with average gains of 0.2 percent, led by a 0.7 percent rebound in nickel after yesterday’s 1.2 percent fall. Copper is up 0.5 percent at $5,571.50, while the rest of the metals are little changed. Volume is light at 3,869 lots traded.
Precious metals are mixed this morning with palladium up 0.3 percent, while the rest remain slightly weaker but in low ground with gold at $1,146.80.
In Shanghai, the base metals are mixed, with zinc up one percent, nickel down one percent, while the rest are little changed with copper off 0.1 percent at Rmb 40,430. Spot copper is off 0.7 percent at Rmb 40,900-41,100, with the backwardation with the September futures back at around an equivalent of $108, in from over $200 recently. The LME/Shanghai copper arb ratio is wider at 7.43, which should mean the arb window is open.
Precious metals in Shanghai are down with silver off 1.8 percent and the gold price off one percent. Elsewhere in China, iron ore prices are trading at around the $50 level, while steel rebar is off 0.1 percent.
Equities – the Euro Stoxx 50 was up 0.5 percent yesterday, while the Dow and other US indices closed little changed with a slight downward bias, despite better US data. Asia is mixed this morning with the Nikkei up 1.6 percent, the Hang Seng is off 0.2 percent and the CSI is choppy, but is still positve on the day.
Currencies – the better US data and comments by Fed Chair Janet Yellen, speaking before the House Financial Services Committee, that if the US economy maintains the current trajectory an initial rate rise would be appropriate sometime in 2015, have given the dollar a boost with the dollar index at 97.34. Currencies are weaker on the back of that with the euro at 1.0920, the yen at 123.86, the aussie at 0.7360, the rouble at 56.99, while sterling is holding up well at 1.5615 and the yuan is flat at 6.2080.
The economic agenda is busy with data on the trade balance for the EU and Italy, EU CPI, the ECB interest rate decision and press conference, UK leading indicators and a host of US data including: initial jobless claims, the Philly Fed manufacturing index, NAHB housing market index, national gas storage and TIC long-term purchases. In addition, the Bank of England Mark carney is speaking this evening – see table below for more details. Data just out shows EU passenger car registrations rose 14.6 percent in June and were up 8.2 percent in the first half of the year – this should help PGMs.
The dollar strength is weighing on an already weak bullion market and with gold prices down at a low of $1,143.50 yesterday, they are testing the March low at $1,142.90 and not far off the November low at $1,131.60. Prices look oversold but the path of least resistance is to the downside. There is room for short-covering but there are a lack of bullish catalysts – will these previous lows prompt a bounce? Silver is following gold, while sentiment in the PGMs have been extremely weak, we wait to see if the strong EU vehicle sales data provides a re-think.
The base metals’ rallies paused yesterday, but they are looking well placed to rally again now, especially aluminium, lead, zinc and tin, we wait to see if nickel and copper follow.
| Overnight Performance | ||||
| BST | 06:36 | +/- | +/- % | Lots |
| Cu | 5571.5 | 27 | 0.5% | 1703 |
| Al | 1715 | 0.5 | 0.0% | 450 |
| Ni | 11535 | 75 | 0.7% | 726 |
| Zn | 2083 | 2.5 | 0.1% | 708 |
| Pb | 1860.5 | -3.5 | -0.2% | 267 |
| Sn | 14670 | 20 | 0.1% | 15 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | 0.2% | 3,869 | ||
| Gold | 1146.8 | -1.8 | -0.2% | |
| Silver | 15.07 | -0.02 | -0.1% | |
| Platinum | 1014.9 | -1.1 | -0.1% | |
| Palladium | 642.2 | 2.2 | 0.3% | |
| Average PM | 0.0% | |||
| SHFE Prices 06:43 BST | Change | % Change | |
| Cu | 40430 | -30 | -0.1% |
| AL | 12415 | -5 | 0.0% |
| Zn | 15740 | 155 | 1.0% |
| Pb | 13120 | -30 | -0.2% |
| Ni | 84940 | -900 | -1.0% |
| Sn | 108920 | -280 | -0.3% |
| Average change (base metals) | 236.5 | -0.1% | |
| Rebar | 2055 | -2 | -0.1% |
| Au | 231.55 | -2.35 | -1.0% |
| Ag | 3299 | -59 | -1.8% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 6:00am | Japan | BOJ Monthly Report | |||
| 9:00am | Italy | Italian Trade Balance | 2.83B | 3.74B | |
| 10:00am | EU | Final CPI y/y | 0.2% | 0.2% | |
| 10:00am | EU | Final Core CPI y/y | 0.8% | 0.8% | |
| 10:00am | EU | Trade Balance | 22.3B | 24.3B | |
| Tentative | Spain | Spanish 10-y Bond Auction | 2.26|1.8 | ||
| All Day | EU | Eurogroup Meetings | |||
| 12:45pm | EU | Minimum Bid Rate | 0.1% | 0.1% | |
| 1:30pm | EU | ECB Press Conference | |||
| 1:30pm | US | Unemployment Claims | 284K | 297K | |
| 2:30pm | UK | CB Leading Index m/m | 0.4% | ||
| 3:00pm | US | Fed Chair Yellen Testifies | |||
| 3:00pm | US | Philly Fed Manufacturing Index | 11.9 | 15.2 | |
| 3:00pm | US | NAHB Housing Market Index | 59 | 59 | |
| 3:30pm | US | Natural Gas Storage | 89B | 91B | |
| 7:00pm | UK | BOE Gov Carney Speaks | |||
| 9:00pm | US | TIC Long-Term Purchases | 53.9B | ||
The post Base metals looking brighter, while the strong dollar weighs on the gold price appeared first on The Bullion Desk.
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