Base and precious metals prices attract dip buying

Trading in the base metals this morning has been quieter with volume of 4,189 lots traded as of 06:38 GMT, consolidation and some bargain hunting seem to be the order of the day, with three-month aluminium, lead and tin prices little changed, zinc prices are down 0.6%, nickel prices are up 0.3% and copper prices are up 0.5% at $5,544 per tonne. Precious metals are firmer across the board with gains of between 0.3 and 0.7%, led by silver, spot gold prices are up 0.4% at $1,136.30 per oz.

This morning’s consolidation follows on from a generally positive day yesterday, December 20, when the base metals closed up an average of 0.4%, the outperformers were zinc with a 1.2% price gain and tin that saw its price drop 0.9%. Precious metals were split between silver prices that closed up 0.3%, gold prices closed down 0.6% at $1,131.75 per oz, platinum prices were down 0.2%, while palladium prices continued their correction with prices falling 2.5%.

This morning in Shanghai, the base metals are firmer across the board with prices up an average of 1.2%, led by a 2.3% rise in lead, copper prices are up 0.7% at Rmb 45,280 per tonne and nickel is up the least with a 0.6% rise. Spot copper in Changjiang is up 0.8% at Rmb 44,990-45,190, the spread with the February futures has reverted to a small contango equivalent to around $13 per tonne, while the LME/Shanghai copper arb ratio is at 8.17.

In other metals in China, steel rebar prices are up 0.4%, gold prices are down 0.5% and silver prices are off 0.7%.

Equities were bullish yesterday, December 20 with the Euro Stoxx 50 closing up 0.7% and the Dow nudged closer to the 20,000 level, it closed up 0.5% at 19,974. The Nikkei is off 0.3% this morning, the Kospi is off 0.2%, the Hang Seng is up 0.7%, the CSI 300 is up 0.8% and the ASX 200 is up 0.4%.  So generally sentiment in broader markets remains bullish.

In FX, the dollar index set a fresh high yesterday at 103.65, it was recently quoted at 103.11, the euro slipped to a low of 1.0352, it was recently quoted at 1.0414, sterling is weaker at 1.2366, the yen is firmer at 117.48, as is the aussie at 0.7259, having been weaker yesterday. In emerging market currencies the yuan is firmer at 6.9316 and the other currencies we follow are slightly firmer, the exception being the ringgit.

The economic agenda is fairly quiet, Japan’s all industries activity rose 0.2%. Later there is data out on UK public sector borrowing, EU consumer confidence, US existing home sales and crude oil inventories – see table below for more details.

The sell-off/correction in the base metals is no rush for the exit, there appear to be bouts of dip buying around and given previous pullbacks have been limited in duration, it may be that solid buying returns sooner rather than later as traders and investors look forward to stronger fundamentals in 2017.

Gold prices are consolidating either side of $1,130 per oz, but despite the significant price weakness in the fourth quarter, there seems no rush to bargain hunt and that is no doubt due the confidence being seen in other markets, especially equities. Silver prices left behind a large underlying tail on yesterday’s candlestick as was seen on the platinum chart too – both are signs of dip buying, while palladium prices continue to correct. The platinum/palladium ratio had dropped to a low of 1.16 at the end of November, it has recent rebounded to 1.37.

 

Overnight Performance
GMT	06:38	+/-	+/- %	Lots
Cu	5544	28.5	0.5%	1512
Al	1725.5	0.5	0.0%	294
Ni	10980	35	0.3%	834
Zn	2625.5	-17	-0.6%	1390
Pb	2185.5	-4.5	-0.2%	140
Sn	20965	35	0.2%	19
	Average		0.0%	4,189
Gold	1136.31	4.56	0.4%
Silver	16.155	0.11	0.7%
Platinum	919.6	3.6	0.4%
Palladium	665	2	0.3%
	Average PM		0.4%

 

SHFE Prices 06:52 GMT	RMB	Change	% Change
Cu	45280	310	0.7%
AL	12785	150	1.2%
Zn	21385	275	1.3%
Pb	18435	415	2.3%
Ni	92930	520	0.6%
Sn	145100	1440	1.0%
Average change (base metals)	0		1.2%
Rebar	3170	13	0.4%
Au	264.7	-1.45	-0.5%
Ag	4046	-28	-0.7%

 

Economic Agenda
GMT	Country	Data	Actual	Expected	Previous
4:30am	Japan	All Industries Activity m/m	0.2%	0.1%	0.0%
9:30am	UK	Public Sector Net Borrowing		11.5B	4.3B
3:00pm	EU	Consumer Confidence		-6	-6
3:00pm	US	Existing Home Sales		5.52M	5.60M
3:30pm	US	Crude Oil Inventories		-2.4M	-2.6M

The post Base and precious metals prices attract dip buying appeared first on The Bullion Desk.

from The Bullion Desk http://ift.tt/2h0sAxQ
via IFTTT