Base metals are 0.4 percent on the LME and 2.4 percent on SHFE; precious metals up 0.7 percent – basis group averages. China’s equity rebound continues and Greece has proposed a new bailout plan.
The base metals are stronger across the board this morning with a 0.9 percent gain in nickel leading the way, followed by 0.5 percent gains in zinc and tin, a 0.4 percent gain in aluminium, 0.2 percent in lead, while copper is little changed at $5,616. This is up from an average gain of 2.1 percent yesterday. Volume has dropped to 4,781 lots, which is above average but well below some of the recent peaks from this time of day.
Palladium prices are 1.2 percent higher at $643.70, platinum is up 0.8 percent at $1,030.10, while gold and silver are up 0.3 percent with gold at $1,161.90. Platinum is trading at a $130 discount to gold.
In Shanghai, nickel leads the rally with a five percent gain, which is a limit up move, tin, lead and zinc are up around two percent, copper and aluminium are up around 1.5 percent with copper at Rmb 40,700. Spot copper in Changjiang is up one percent at Rmb 41,500-41,800, the backwardation with the September contracts is at an equivalent of $177 per tonne and the LME/Shanghai copper arb ratio is at 7.4, which means the arb window should be open to some traders. This should help underpin LME prices.
Gold in Shanghai is up 0.1 percent, but silver is up 2.3 percent – mirroring the 2.3 percent rise in international silver prices yesterday.
Equities – Yesterday Europe was upbeat with a 2.8 percent gain, while the Dow struggled with a 0.2 percent gain. In Asia, China’s CSI 300 is up 5.4 percent, the Nikkei is off 0.5 percent, the Hang Seng is up 2.1 percent and the Kospi is up 0.2 percent.
Currencies – the dollar’s recent show of strength is easing with the index at 96.13 after a move up to 97.24 on Tuesday, from recent low of 93.56. The euro is firmer at 1.1103, as are sterling at 1.5403, the aussie at 0.7480, while the yen is easier at 121.90 as safe-haven needs wane. The rouble is last at 56.02 and the yuan is at 6.2089.
Today’s data shows Japan’s PPI slipping to minus 2.4 percent, while consumer confidence climbed to 41.7 from 41.4. Data out later includes French and Italian industrial production, the UK trade balance, construction output and US wholesale inventories. In addition, Fed Chair Janet Yellen is speaking about the economic outlook – see table below.
The base metals are continuing their rebound as short-covering and bargain hunting take advantage of the recent surge lower. The markets are likely to remain nervous as there is still a lot of uncertainty over Greece as Greek Prime Minister Alexis Tsipras has to pursuade the Greek Parliament to get behind the proposal today and then it will be discussed at Sunday’s EU summit. In addition, the markets are nervous about the degree to which China’s rebound is being driven by government intervention. This uncertainty may well mean the rebounds continue for a while if there are no setbacks, as buying might drip-feed back into the markets as confidence gradually spreads.
Gold is edging higher despite a more stable outlook, but just as gold has been under pressure during this turmoil, it seems that it too is seeing some relief buying, while silver is getting some lift as it follows the other industrial metals. The PGMs have stopped falling for now but are not yet getting much lift as seen by platinum’s $130 discount to gold. the PGMs continue to look extremely oversold.
| Overnight Performance | ||||
| BST | 06:11 | +/- | +/- % | Lots |
| Cu | 5616 | 1 | 0.0% | 2402 |
| Al | 1701 | 6 | 0.4% | 450 |
| Ni | 11555 | 105 | 0.9% | 735 |
| Zn | 2023 | 10 | 0.5% | 870 |
| Pb | 1820 | 4 | 0.2% | 305 |
| Sn | 14300 | 75 | 0.5% | 19 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | 0.4% | 4,781 | ||
| Gold | 1161.8 | 3.7 | 0.3% | |
| Silver | 15.46 | 0.05 | 0.3% | |
| Platinum | 1029 | 7 | 0.7% | |
| Palladium | 645 | 9 | 1.4% | |
| Average PM | 0.7% | |||
| SHFE Prices 06:14 BST | Change | % Change | |
| Cu | 40700 | 640 | 1.6% |
| AL | 12470 | 180 | 1.5% |
| Zn | 15365 | 335 | 2.2% |
| Pb | 12960 | 265 | 2.1% |
| Ni | 85170 | 4050 | 5.0% |
| Sn | 108930 | 2090 | 2.0% |
| Average change (base metals) | 236.5 | 2.4% | |
| Rebar | 2038 | 63 | 3.2% |
| Au | 235.2 | 0.15 | 0.1% |
| Ag | 3390 | 77 | 2.3% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:50am | Japan | PPI y/y | -2.4% | -2.2% | -2.2% |
| 6:00am | Japan | Consumer Confidence | 41.7 | 41.9 | 41.4 |
| 7:45am | france | French Industrial Production m/m | 0.5% | -0.9% | |
| 9:00am | Italy | Italian Industrial Production m/m | 0.3% | -0.3% | |
| 9:30am | UK | Trade Balance | -9.7B | -8.6B | |
| 9:30am | UK | Construction Output m/m | 0.7% | -0.8% | |
| 3:00pm | US | Wholesale Inventories m/m | 0.3% | 0.4% | |
| 5:30pm | US | Fed Chair Yellen Speaks | |||
The post Gold price bounces as risk-off pressures ease appeared first on The Bullion Desk.
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