Review – Base metals closed off an average of 0.9 percent yesterday, the precious metals were off 0.4 percent. Better US data on the whole kept the dollar bid, which weighed on commodity prices.
This morning the base metals are mixed, but little changed with average losses of 0.1 percent. Aluminium is off 0.3 percent, lead, zinc and tin are off 0.2 percent, while nickel is up 0.4 percent and copper is little changed at $5,255 – volume across the LME is light with 2,705 lots traded as of 06:17 BST.
Precious metals are weaker this mroning by an average of 0.3 percent, with gold and silver off 0.3 percent, platinum down 0. 4 percent and palladium unchanged. Gold is last at $1,084.20, after a low of $1,077.50 a week ago.
In Shanghai, the base metals are down an average of 0.5 percent led by a 1.3 percent drop in nickel, copper is off 0.7 percent at Rmb 38,400, while lead is the only one not lower, it is unchanged at Rmb 13,175. Spot copper in Changjiang is off 1.1 percent at Rmb 38,950-39,100, the backwardation with the futures is at an equivalent of around $112 per tonnes, while the LME/Shanghai copper arb ratio is at 7.87, which means the arb window is open that should provide some support to LME copper prices. Note taht the Shanghai tin price is weaker despite strength in LME prices – this is not so surprising as China has this year turned more self-sufficient.
Precious metals in Shanghai are weaker with gold off 0.8 percent and silver down 0.5 percent.
Equities – the slightly worse than expected US GDP pulled US equities lower initially yesterday, but the early losses were all but erased by the close, while the Euro Stoxx 50 closed up 0.2 percent and Asia is mixed with the Nikkei and Hang Seng up 0.1 percent, the Kospi is up 0.2 percent, while China’s CSI 300 is off 0.2 percent.
Currencies – the generally solid US economic data of late means the Fed is seen as being on course to raise interest rate sometime this year and that is underpinning the dollar index that is at 97.41, the euro is at 1.0938, sterling is flat at 1.5608, the yen is weak at 124.03, as are the aussie at 0.7296 and the rouble at 59.52.
The economic agenda has been busy with generally disappointing Japanese data, although housing starts did leap 16.3 percent, which is the fourth consecutive rise after 12 months of declines. Later we get German retail sales, French consumer spending, Italian and EU unemployment rate and CPI, while US data includes Chicago PMI and University of Michigan consumer sentiment and inflation expectations – see table below for more details.
The precious metals remain washed-out, rebounds continue to be sold into, which is keeping the upside capped, while support levels are in danger of being eroded further. The stronger dollar and prospects of a US interest rate rise are the headwinds and lack of investor fear in other markets and their confidence in the financial system means gold remains out of favour with investors.
For the most part, the base metals remain under pressure as the stronger dollar, weak demand outlook and oversupply means buying pressure remains weak. The exception remains tin, where concerns that Indonesian exports will dry up in August has prompted short-covering and pricing. Uncoordinated Indonesian government policy over output and exports look set to delay exports for a while so further gains would not be surprising. On balance, the rest of the base metals look set to range trade in low ground.
| Overnight Performance | ||||
| BST | 06:17 | +/- | +/- % | Lots |
| Cu | 5266.5 | 9 | 0.2% | 1172 |
| Al | 1640 | -5.5 | -0.3% | 310 |
| Ni | 11075 | 70 | 0.6% | 828 |
| Zn | 1950 | 1 | 0.1% | 293 |
| Pb | 1714 | -1 | -0.1% | 94 |
| Sn | 16155 | -25 | -0.2% | 8 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | 0.1% | 2705 | ||
| Gold | 1084.1 | -3.9 | -0.4% | |
| Silver | 14.67 | -0.05 | -0.3% | |
| Platinum | 981.8 | -4.2 | -0.4% | |
| Palladium | 619.5 | 0.5 | 0.1% | |
| Average PM | -0.3% | |||
| SHFE Prices 6:18 BST | Change | % Change | |
| Cu | 38400 | -280 | -0.7% |
| AL | 12265 | -30 | -0.2% |
| Zn | 14905 | -40 | -0.3% |
| Pb | 13175 | 0 | 0.0% |
| Ni | 82540 | -1080 | -1.3% |
| Sn | 110610 | -540 | -0.5% |
| Average change (base metals) | 236.5 | -0.5% | |
| Rebar | 2097 | 0 | 0.0% |
| Au | 219.1 | -1.7 | -0.8% |
| Ag | 3230 | -17 | -0.5% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:30am | Japan | Household Spending y/y | -2.0% | 2.0% | 4.8% |
| 12:30am | Japan | Tokyo Core CPI y/y | -0.1% | 0.0% | 0.1% |
| 12:30am | Japan | National Core CPI y/y | 0.1% | 0.0% | 0.1% |
| 12:30am | Japan | Unemployment Rate | 3.4% | 3.3% | 3.3% |
| 2:30am | AUS | PPI q/q | 0.3% | 0.2% | 0.5% |
| 2:30am | AUD | Private Sector Credit m/m | 0.4% | 0.5% | 0.5% |
| 6:00am | Japan | Housing Starts y/y | 16.3% | 3.2% | 5.8% |
| 7:00am | Germany | German Retail Sales m/m | 0.3% | 0.5% | |
| 7:45am | France | French Consumer Spending m/m | 0.7% | 0.1% | |
| 9:00am | Italy | Italian Monthly Unemployment Rate | 12.3% | 12.4% | |
| 10:00am | EU | CPI Flash Estimate y/y | 0.2% | 0.2% | |
| 10:00am | EU | Core CPI Flash Estimate y/y | 0.8% | 0.8% | |
| 10:00am | EU | Unemployment Rate | 11.0% | 11.1% | |
| 10:00am | EU | Italian Prelim CPI m/m | 0.0% | 0.1% | |
| 1:30pm | US | Employment Cost Index q/q | 0.6% | 0.7% | |
| 2:45pm | US | Chicago PMI | 50.7 | 49.4 | |
| 3:00pm | US | Revised UoM Consumer Sentiment | 94.2 | 93.3 | |
| 3:00pm | US | Revised UoM Inflation Expectations | 2.8% | ||
The post Metals remain under pressure, tin the exception appeared first on The Bullion Desk.
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