Copper looking more robust, the other metals are looking quite mixed

The base metals closed down an average of 0.9 percent yesterday as prices failed to get follow through buying following Wednesday’s run-up. Zinc gave back all its gains, nickel continued lower having avoided rebounding on Wednesday, while copper bucked the trend to close up 0.2 percent at $4,780.

Precious metals were mixed, gold slipped 0.5 percent to $1,315.90, silver was little changed, platinum was off 0.3 percent and palladium rallied 0.6 percent to $655.

This morning trading has been quiet with just 1,801 lots traded as of 07:11 BST, tin is up 0.5 percent at $19,095, the rest are ranged between up 0.3 percent for nickel and down 0.2 percent for zinc, copper is little changed at $4,781.

Precious metals are down across the board, the PGMs are off around 0.7 percent, silver is off 0.2 percent at $18.93 and gold prices are off 0.1 percent at $1,314.40.

Equities were steadier yesterday with the Euro Stoxx 50 closing up 0.3 percent while the Dow closed up one percent and Asia is looking firmer too this morning with the Nikkei up 0.7 percent and the ASX 200 is up one percent.

In FX, the dollar index is in mid-ground at 95.32, as are the euro at 1.1238, sterling at 1.3228, the yen are 102.05, while the aussie is rebounding off recent weakness, last at 0.7505. In emerging market currencies, the yuan is at 6.6723 and most of the other emerging market currencies we follow have firmed up after recent weakness, suggesting risk-on my be returning.

Economic data out today includes Italian trade balance, US CPI, University of Michigan consumer sentiment, inflation expectations and TIC long term purchases. There is also an EU economic summit, without the UK, with leaders looking at the way ahead without Britain – see table below.

Copper has turned from looking one of the weakest of the base metals in recent months to the strongest, with prices holding on and building on to the gains seen on Wednesday. The other metals are looking mixed with zinc and nickel are looking vulnerable still, aluminium and tin are consolidating and lead has held on to most of its gains. We still see the recent weakness as a combination of profit-taking and some scale-up selling and expect the dips to be supported as has started to be seen in copper.

The precious metals are on a back foot with platinum leading the drift lower, with palladium following, while gold prices are testing support levels, which are holding for now and silver is following gold’s lead. For gold we remain bullish overall, but given the extended long position and the drift lower in prices, there may well be room for more stale long liquidation that could lead to a sell-off, even if it is short-lived and limited. 

 

Overnight Performance
BST	07:07	+/-	+/- %	Lots
Cu	4781	0.5	0.0%	480
Al	1572.5	-1.5	-0.1%	265
Ni	9740	25	0.3%	252
Zn	2226	-5.5	-0.2%	674
Pb	1942	-2	-0.1%	73
Sn	19095	90	0.5%	57
	Average		0.0%	1,801
Gold	1314.41	-1.49	-0.1%
Silver	18.929	-0.031	-0.2%
Platinum	1023.2	-6.8	-0.7%
Palladium	651.1	-3.9	-0.6%
	Average PM		-0.4%

 

Economic Agenda
BST	Country	Data	Actual	Expected	Previous
All Day	China	Bank Holiday
9:00am	Italy	Italian Trade Balance		3.67B	4.66B
All Day	EU	EU Economic Summit
1:30pm	US	CPI m/m		0.1%	0.0%
1:30pm	US	Core CPI m/m		0.2%	0.1%
3:00pm	US	Prelim UoM Consumer Sentiment		91	89.8
3:00pm	US	Prelim UoM Inflation Expectations			2.5%
9:00pm	US	TIC Long-Term Purchases		30.2B	-3.6B

 

 

 

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