The metals closed up an average of 0.9 percent on Friday, led by gains of 2.5 percent in tin, 1.7 percent in nickel and 0.9 percent in lead, while the rest were little changed with copper off 0.1 percent at $5,170. Precious metals were mixed with silver off 1.1 percent at $15.21, while the rest were little changed with gold at $1,114.80.
This morning the base metals are weaker by an average of 0.4 percent, led by a one percent pullback in tin and a 0.6 percent fall in copper to $5,137.50. Volume has been light at 2,207 lots, the bulk, 1,534 lots, being in copper.
Precious metals are firmer this morning by an average of 0.3 percent, led by a 0.5 percent gain in platinum to $993.70, while the rest are up 0.2 percent with gold at $1,116.50.
In Shanghai, the base metals are down across the board by an average of 0.5 percent, with copper off the most with a 0.9 percent drop to Rmb 39,060, while the rest are down between 0.3 and 0.5 percent. Spot copper is down 0.8 percent at Rmb 39,150-39,280, the backwardation is at a relatively low equivalent of some $35 per tonne and the LME/Shanghai copper arb ratio is at around 7.60, meaning the arb window is open.
In other metals, gold, silver and steel rebar are weaker by 0.3, 1.4 and 0.8 percent respectively and iron ore prices in Shanghai are last around $56.20.
Equities were mixed on Friday with the Euro Stox50 off 0.7 percent but the Dow closed up 0.4 percent and Asia has also been mixed this morning with the Nikkei up 0.2 percent, the Hang Seng is off 0.9 percent, the CSI 300 is off 0.4 percent and the Kospi is down 0.6 percent. Jitters about the aftermath of China’s new currency stance are still weighing on the markets.
Currencies – the yuan is last at 6.4402, little changed from Friday but other emerging market currencies remain on a back footing, while the dollar index is edging higher again at 96.66, the euro is last at 1.1100, sterling is firm at 1.5655, the aussie’s rebound has paused at 0.7375, the yen is at 124.38 and the rouble is weak at 64.95.
Data out already shows Japan’s preliminary GDP dropped 0.4 percent q/q, which was slightly better than the 0.5 percent fall expected, but it was the first quarter-on-quarter fall after two quarters of positive GDP. The GDP price index also rose less than expected. Data out later included the EU trade balance, the German Bundesbank’s monthly report and US data includes the Empire State manufacturing index, NAHB housing market index and TIC long- term purchases data – see table below for more details.
The base metals for the most part look weak and vulnerable as sentiment towards demand remains bearish. Funds on Comex continued to increase short exposure. Out of the complex, lead looks the strongest as it tries to rebound, while rebounds in most of the other metals have once again run into resistance. The metals look oversold, but potential buyers seem in no hurry to take advantage of these low prices and while demand remains weak, it will probably take further supply responses to change sentiment.
Precious metals for now seem to be holding on well to most of their gains following the rebounds after China’s devaluation. China’s policy shift and the fall-out in emerging market currencies seem to be fuelling some investor interest into gold as the metal can act as a non-fiat currency. Key will be whether prices can push up back above $1,150, which might the prompt fund short-covering. CFTC data out on Friday showed fresh buying outpace fresh selling, but there was little sign of short-covering.
| Overnight Performance | ||||
| BST | 06:04:43 | +/- | +/- % | Lots |
| Cu | 5137.5 | -32.5 | -0.6% | 1534 |
| Al | 1575.5 | 0.5 | 0.0% | 136 |
| Ni | 10600 | -25 | -0.2% | 240 |
| Zn | 1824.5 | -8.5 | -0.5% | 238 |
| Pb | 1749 | -3.5 | -0.2% | 55 |
| Sn | 15275 | -150 | -1.0% | 4 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | -0.4% | 2207 | ||
| Gold | 1116.5 | 1.7 | 0.2% | |
| Silver | 15.24 | 0.03 | 0.2% | |
| Platinum | 993.7 | 4.7 | 0.5% | |
| Palladium | 616.3 | 1.3 | 0.2% | |
| Average PM | 0.3% | |||
| SHFE Prices 6:04 BST | Change | % Change | |
|
Cu |
39060 | -360 | -0.9% |
| AL | 12050 | -60 | -0.5% |
| Zn | 14845 | -65 | -0.4% |
| Pb | 13260 | -35 | -0.3% |
| Ni | 81820 | -220 | -0.3% |
| Sn | 107410 | -360 | -0.3% |
| Average change (base metals) | 236.5 | -0.5% | |
| Rebar | 2068 | -17 | -0.8% |
| Au | 232.15 | -0.6 | -0.3% |
| Ag | 3447 | -50 | -1.4% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:01am | UK | Rightmove HPI m/m | -0.8% | 0.1% | |
| 12:50am | Japan | Prelim GDP q/q | -0.4% | -0.5% | 1.0% |
| 12:50am | Japan | Prelim GDP Price Index y/y | 1.6% | 2.2% | 3.4% |
| 10:00am | EU | Trade Balance | 19.3B | 21.2B | |
| 11:00am | Germany | German Buba Monthly Report | |||
| 1:30pm | US | Empire State Manufacturing Index | 5 | 3.9 | |
| 3:00pm | US | NAHB Housing Market Index | 62 | 60 | |
| 9:00pm | US | TIC Long-Term Purchases | 23.0B | 93.0B | |
The post Copper price remains weak in line with sentiment over demand appeared first on The Bullion Desk.
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