- Late data out yesterday saw US vehicle annualised sales of 17.8 million for August; expectations were for 17.3 million, after July’s 17.6 million sales.
Precious metals were mixed yesterday, bullion prices were firmer led by a 0.6 percent rise in gold to $1,139.80, silver was little changed, while the PGMs gave back some of their gains with prices declining an average of 1.6 percent. This morning, bullion is little changed, gold is at $1,138.80 and platinum is up 0.5 percent at $1,007.40. Platinum is still at a $131 discount to gold.
The base metals were mixed yesterday with tin up 4.6 percent to $14,700, while at the other extreme nickel was down 3.2 percent at $9,740 and copper was down 1.5 percent at $5,068. Considering equities were jittery and weak, following poor Chinese PMI data, with the Euro Stoxx 50 closing down 2.5 percent and the Dow closing off 2.8 percent, the base metals held up relatively well, which suggests the rebounds that started on Thursday may not be over yet .
This morning the base metals are again mixed, but generally little changed as they consolidate – the exception is nickel that is up 0.9 percent at $9,830. Some talk recently that the Indonesian ore ban may be relaxed may well have caused yesterday’s weakness in nickel, but a subsequent denial by Coal and Minerals Director General Bambang Gatot suggests there will be no relaxation of the ore ban. Copper is up 0.3 percent at $5,081. Volume this morning is light at 3,840 lots, the bulk, 2137 lots, being in copper.
In Shanghai, the base metals are mixed, copper, nickel and tin are down 0.4 percent, while aluminium, zinc and lead are up between 0.1 and 0.3 percent. Copper is last at Rmb 39,070. Spot copper in Shanghai is off 0.6 percent at Rmb 39,150-239,250, the backwardation with the futures is at an equivalent of around $28 per tonne and the LME/Shanghai copper arb window remains open with the ratio at 7.70.
Gold and silver in in Shanghai are mixed with gold up 0.3 percent and silver off 0.1 percent, steel rebar is off 0.2 percent and iron ore prices are firmer at $56.60.
Equities – after yesterday’s weakness the CSI 300 initial continued lower this morning and at one stage was off 4.4 percent, but it appears the plunge protection team has been active and the market is now well into positive territory as the government tries to stabilise the market ahead of holidays on September 3-5 to mark the 70th anniversary of allied victory over Japan in World War II. The Nikkei is up 1.1 percent, the Hang Seng is little changed and the Kospi is up 0.2 percent. Whether this rebound will be enough to instil the confidence in the broader markets remains to be seen, but with China closed for the rest of the week the markets might get a bit of a respite.
Currencies – the dollar index is consolidating at around 95.60, the euro is last at 1.1275, cable is weak at 1.5306, as is the aussie at 0.7030 while the yen is consolidating at 120.20, as is the yuan either side of 6.4100. The real, rand and rupiah are all looking weak again, while the rupee is managing to consolidate.
The economic agenda sees the start of this week’s US employment data with the ADP non-farm employment change, but ahead of that there is data on Spanish unemployment change, UK construction PMI and EU PPI, plus there is US data on revised non-farm productivity, unit labor costs, factory orders, crude oil inventories and the Beige Book – see table below for more details.
The base metals are consolidating after last week’s show of strength and yesterday’s easier tone – for the most part they remain well placed to extend the rebounds. This in turn could trigger short-covering, especially in those metals where the money managers’ gross short position is extended, which is the case in aluminium, zinc and to a lesser extent copper. Even nickel that saw a considerable sell-off yesterday seems well placed to recover. Outside China, such things as strong US vehicle sales, suggest not all is bad.
Gold is leading the precious metals higher, but the other metals are in various stages of consolidation. Continued concerns over China and the contagion from there seem likely underpin interest in gold.
| Overnight Performance | ||||
| BST | 05:29:40 | +/- | +/- % | Lots |
| Cu | 5081 | 13 | 0.3% | 2137 |
| Al | 1597.5 | 0.5 | 0.0% | 823 |
| Ni | 9830 | 90 | 0.9% | 530 |
| Zn | 1807 | 1 | 0.1% | 332 |
| Pb | 1718 | -7.5 | -0.4% | 13 |
| Sn | 14685 | -15 | -0.1% | 5 |
| Steel | 300 | 0 | 0.0% | Total |
| Average (BM ex-Steel) | 0.1% | 3840 | ||
| Gold | 1138.8 | -1 | -0.1% | |
| Silver | 14.57 | -0.02 | -0.1% | |
| Platinum | 1007.4 | 5.4 | 0.5% | |
| Palladium | 573 | 1 | 0.2% | |
| Average PM | 0.1% | |||
| SHFE Prices 5:30 BST | Change | % Change | |
| Cu | 39070 | -140 | -0.4% |
| AL | 11840 | 15 | 0.1% |
| Zn | 14735 | 50 | 0.3% |
| Pb | 13250 | 15 | 0.1% |
| Ni | 76250 | -290 | -0.4% |
| Sn | 101400 | -400 | -0.4% |
| Average change (base metals) | 236.5 | -0.1% | |
| Rebar | 1955 | -3 | -0.2% |
| Au | 236.2 | 0.8 | 0.3% |
| Ag | 3326 | -2 | -0.1% |
| Economic Agenda | |||||
| BST | Country | Data | ACTUAL | Expected | Previous |
| 12:50am | Japan | Monetary Base y/y | 33.3% | 33.2% | 32.8% |
| 8:00am | Spain | Spanish Unemployment Change | 35.3K | -74.0K | |
| 9:30am | UK | Construction PMI | 57.6 | 57.1 | |
| 10:00am | EU | PPI m/m | -0.1% | -0.1% | |
| 1:15pm | US | ADP Non-Farm Employment Change | 204K | 185K | |
| 1:30pm | US | Revised Nonfarm Productivity q/q | 2.9% | 1.3% | |
| 1:30pm | US | Revised Unit Labor Costs q/q | -0.5% | 0.5% | |
| 3:00pm | US | Factory Orders m/m | 0.8% | 1.8% | |
| 3:30pm | US | Crude Oil Inventories | -0.7M | -5.5M | |
| 7:00pm | US | Beige Book | |||
The post Continuing concerns over China likely to underpin gold appeared first on The Bullion Desk.
No comments:
Post a Comment