After strong gains averaging 1.9 percent on Friday and the LME being closed yesterday, the metals are off this morning by an average of 0.7 percent, tin the only metal in the positive, it is up 0.7 percent, while the rest are down an average of one percent, led by a 1.9 percent fall in nickel to $9,865 and copper is off 0.3 percent at $5,129.50. Volume is relatively high at 7,449 lots.
Precious metals are up 0.7 percent on average this morning, compared with yesterday’s closes, led by a 1.9 percent rise in palladium and a 0.7 percent rise in gold to $1,141.50.
In Shanghai, poor PMI data has dampened sentiment further with the official manufacturing PMI falling to 49.7, from 50 and the Caixin manufacturing PMI was 47.3, up from 47.1, but non-manufacturing PMIs were also weaker too, which is of concern as the economic plan is to rebalance the economy favouring the services sectors away from the industrial/export sectors. The base metals are down an average of 0.4 percent, led by a 1.3 percent drop in nickel, aluminium is off 0.9 percent, tin is down 0.5 percent, while copper is up 0.2 percent at Rmb 39,360, lead is up 0.2 percent and zinc is unchanged.
Spot copper in Changjiang is up 0.4 percent at Rmb 39,350-39,500, the backwardation has narrowed to an equivalent of $21 per tonne and the LME/Shanghai copper arb ratio is 7.67.
Precious metals are firmer with gold up 0.4 percent and silver is up 0.3 percent. Steel rebar is up 0.2 percent, iron ore is last at $56.20 and oil prices are easing this morning, of their strong rally in recent days.
Equities – yesterday weakness in Asia spread to Europe and the US where the Euro Stoxx 50 closed off 0.5 percent and the Dow was off 0.7 percent, which has flowed through to a weaker Asia today, where the Nikkei is down 3.2 percent, the Hang Seng is off 0.6 percent, the Kospi is down 1.3 percent and the CSI 300 is down 2.2 percent.
Currencies – the dollar index is edging lower again, last at 95.44, the euro is firmer at 1.1286, as is sterling at 1.5401, the aussie is flat at 0.7125, the yen is firmer at 120.48, while the rouble is at 64.75. The yuan is last at 6.4141 and the emerging market currencies we follow are largely consolidating off recent lows.
The economic agenda is busy with PMI manufacturing and services data out across Europe and the US, plus there is data on German and Italian unemployment change, UK lending, EU unemployment rate, US construction spending, IBD/TIPP economic optimism and total vehicle sales – see table below.
The base metals are still entrenched in downward trends, but recently prices have attempted to rebound. Given today’s poor Chinese PMI data the rebounds may well struggle. If the rallies do not struggle much, or if it is short-lived, then it will suggest short-covering and bargain hunting have become the driving forces, at least for a while. Friday’s CFTC data for Comex copper showed non-commercials shorts covered 6,137 contracts, while only 490 longs liquidated; we wait to see what the LME commitment of traders report shows tomorrow. The higher oil price may well add support to the base metals as it will raise producers’ productions costs.
Gold is leading the precious metals higher with prices climbing back through the $1,140 level, suggesting another up leg is underway and the other precious metals are following to various degrees, but look well placed to push higher.
| Overnight Performance | ||||
| BST | 06:33:49 | +/- | +/- % | Lots |
| Cu | 5129.5 | -14 | -0.3% | 2435 |
| Al | 1580 | -25 | -1.6% | 2705 |
| Ni | 9865 | -195 | -1.9% | 989 |
| Zn | 1805.5 | -6.5 | -0.4% | 1045 |
| Pb | 1720 | -11 | -0.6% | 273 |
| Sn | 14145 | 95 | 0.7% | 2 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | -0.7% | 7449 | ||
| Gold | 1141.5 | 8.2 | 0.7% | |
| Silver | 14.66 | 0.09 | 0.6% | |
| Platinum | 1010.6 | -5.4 | -0.5% | |
| Palladium | 594 | 11 | 1.9% | |
| Average PM | 0.7% | |||
| SHFE Prices 6:44 BST | Change | % Change | |
| Cu | 39360 | 80 | 0.2% |
| AL | 11835 | -110 | -0.9% |
| Zn | 14735 | 5 | 0.0% |
| Pb | 13400 | 30 | 0.2% |
| Ni | 76870 | -980 | -1.3% |
| Sn | 100000 | -470 | -0.5% |
| Average change (base metals) | 236.5 | -0.4% | |
| Rebar | 1964 | 4 | 0.2% |
| Au | 236.55 | 0.85 | 0.4% |
| Ag | 3347 | 9 | 0.3% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:50am | Japan | Capital Spending q/y | 5.6% | 9.0% | 7.3% |
| 2:00am | China | Manufacturing PMI | 49.7 | 49.8 | 50 |
| 2:00am | China | Non-Manufacturing PMI | 53.4 | 53.9 | |
| 2:35am | Japan | Final Manufacturing PMI | 51.7 | 51.9 | 51.9 |
| 2:45am | China | Caixin Final Manufacturing PMI | 47.3 | 47.2 | 47.1 |
| 2:45am | China | Caixin Services PMI | 51.5 | 53.9 | 53.8 |
| 8:15am | Spain | Spanish Manufacturing PMI | 53.9 | 53.6 | |
| 8:45am | Italy | Italian Manufacturing PMI | 56.2 | 55.3 | |
| 8:50am | France | French Final Manufacturing PMI | 48.6 | 48.6 | |
| 8:55am | Germany | German Unemployment Change | -3K | 9K | |
| 8:55am | Germany | German Final Manufacturing PMI | 53.2 | 53.2 | |
| 9:00am | EU | Final Manufacturing PMI | 52.4 | 52.4 | |
| 9:00am | EU | Italian Monthly Unemployment Rate | 12.7% | 12.7% | |
| 9:00am | EU | Italian Quarterly Unemployment Rate | 12.5% | 12.4% | |
| 9:30am | UK | Manufacturing PMI | 51.9 | 51.9 | |
| 9:30am | UK | Net Lending to Individuals m/m | 3.9B | 3.8B | |
| 9:30am | UK | M4 Money Supply m/m | 0.2% | -0.5% | |
| 9:30am | UK | Mortgage Approvals | 68K | 67K | |
| 10:00am | EU | Unemployment Rate | 11.1% | 11.1% | |
| 2:45pm | US | Final Manufacturing PMI | 52.9 | 52.9 | |
| 3:00pm | US | ISM Manufacturing PMI | 52.6 | 52.7 | |
| 3:00pm | US | Construction Spending m/m | 0.8% | 0.1% | |
| 3:00pm | US | IBD/TIPP Economic Optimism | 47.3 | 46.9 | |
| 3:00pm | US | ISM Manufacturing Prices | 39.7 | 44 | |
| All Day | US | Total Vehicle Sales | 17.3M | 17.6M | |
The post Gold resumes rebound as other markets remain jittery appeared first on The Bullion Desk.
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