The idea of sound money was devised as an instrument for the protection of civil liberties

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Gold prices consolidate but hold up better than expected

FastMarkets

In precious metals this morning, Friday April 28, platinum and palladium prices lead the gains with prices up 0.6% and 0.4%, respectively, while gold prices are little changed at $1,264.80 per oz and silver prices are up 0.2% at $17.30 per oz.

There is generally a firmer tone in the base metals traded on the London Metal Exchange this morning, with three-month prices up an average of 0.3%, while tin is the only metal showing a loss.

The rest of the complex is up between 0.1% for copper prices that are at $5,720 per tonne and 1% for nickel prices at $9,440 per tonne. Volume remains light with 5,582 lots traded as of 06:28 BST.

Metals prices on the Shanghai Futures Exchange are for the most part higher this morning, the exception is aluminium, where prices are down 1.2%. Copper prices are little changed at 46,290 yuan per tonne, the rest are stronger with zinc prices up 0.5%, tin prices up 0.9%, lead prices up 1.1% and nickel prices up 1.9%.

Spot copper prices in Changjiang are slightly firmer at 46,150-46,300 yuan per tonne and the LME/Shanghai copper arb ratio is weaker, trading at around 8.09.

In other metals in China, September iron ore futures are up 4.3% on the Dalian Commodity Exchange, while on the SHFE, steel rebar prices are up 3.6% and gold and silver prices are little changed.

In international markets, spot Brent crude oil prices are up 0.5% at $52.31 per barrel and the yield on the US ten-year treasuries has eased to 2.29%.

The Euro Stoxx 50 closed down 0.4% on Thursday and Dow was little changed at 20,981.33. In Asia this morning, the markets are mainly weaker with the Nikkei and Hang Seng down 0.4%, the CSI 300 is off 0.8%, the Kospi is down 0.2% and the ASX 200 is little changed. End of month profit-taking combined with raised concerns over North Korea seem to be weighing on sentiment.

The dollar index at 99.21 has halted its slide and is getting some lift, although there is resistance at 99.33 and a gap up to 99.89. The euro at 1.0862 has given back some of its recent gains, the yen at 111.17 has pulled back from recent low of 111.78, the Australian dollar is consolidating in low ground around 0.7474, while the sterling creeps higher – it was recently quoted at 1.2906.

In emerging market (EM) currencies, the yuan is little changed at 6.8932, while most of the other EM currencies we follow are weaker, the exception being the ringgit. This suggests some potential pick-up in risk-off.

There is a mass of data out today, see table below for details. Japan’s industrial production was worse than expected, but retail sales and housing starts were better, French GDP came in at 0.3%, later there is GDP and CPI numbers out across much of Europe, with US data including GDP, Chicago PMI, University of Michigan consumer sentiment and inflation expectations, plus US Federal Open Market Committee (FOMC) members Lael Brainard and Patrick Harker are speaking.

Our stance of remaining quietly bullish for the base metals into the recent weakness, while we wait for the fundamentals to tighten up again, seems to be paying off as support levels have been found and prices are edging higher. There is not much bullishness around though and with volumes quite light it does not look as though the market is about to pick up momentum. As such, we see the market as fairly well balanced with a reasonable demand outlook, but a market that is generally still well supplied given the extra metal units that were sucked out of the woodwork with the run-up in prices between November and February.

Gold prices are on a back footing, but they are holding up quite well, which is probably a result of geopolitical concerns over North Korea and due to the dollar weakness. There are also some signs that physical demand in China and India is picking up again, weak demand in these major consuming countries has not helped gold’s fundamentals. Silver and platinum prices have not held up as well as gold, while palladium extended its high price on Thursday and pushed the envelope even further today with a high of $819 per oz.

Metal Bulletin publishes live futures reports throughout the day, covering major metals exchanges news and prices.

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FastMarkets

Gold and the other precious metals are little changed this morning, Thursday April 27, with spot gold prices off 0.1% at $1,267.24 per oz. This follows on from Wednesday when gold and palladium prices were firmer, while silver and platinum prices were weaker.

The base metals traded on the London Metal Exchange are down across the board this morning, with three-month prices off an average of 0.3%.

Prices are down between 0.2% for tin and 0.5% for nickel, with copper prices down 0.4% at $5,709 per tonne. Volume has been light with 3,630 lots traded as of 06:30 BST.

This follows a generally stronger performance on Wednesday that saw gains average 0.8%, led by a 1.9% rebound in tin prices to $19,910 per tonne, while copper and aluminium prices gained 0.4%.

Metals prices on the Shanghai Futures Exchange are up an average of 0.3% this morning, led by a 1.7% rebound in tin prices, nickel prices remain weak with a 0.7% decline, aluminium prices are off 0.4%, lead and zinc prices are up either side of 0.6% and copper is little changed at 46,290 yuan per tonne.

Spot copper prices in Changjiang are off 0.1% at 46,130-46,280 yuan per tonne and the LME/Shanghai copper arb ratio was trading at around 8.11.

In other metals in China, September iron ore futures are down 1.1% on the Dalian Commodity Exchange, while on the SHFE, steel rebar prices are unchanged and gold and silver prices are little changed.

In international markets, spot Brent crude oil prices are up 0.2% at $51.58 per barrel and the yield on the US ten-year treasuries has eased to 2.31%.

Equities remained buoyant on Wednesday with the Euro Stoxx 50 and Dow only off by around 0.1%, after what has been a strong run higher. The US tax plan excited the markets for a while, but that faded by the close. In Asia this morning, the Nikkei is off 0.2%, the Hang Seng is up 0.1%, the CSI 300 is off 0.3% and the ASX 200 and Kospi are up 0.1%.

The dollar index at 98.93 remains vulnerable as it sits on a support line running under a series of lows dating back to December 2016. The euro at 1.0902 is consolidating recent strength, the yen at 111.23 and the Australian dollar at 0.7483 are consolidating recent weakness and the sterling has broken higher above resistance at 1.2860, it being recently quoted at 1.2869.

In emerging market (EM) currencies, the yuan is weaker at 6.8968, the rupee remains strong at 64.095, the ringgit is strengthening, the peso is reversing recent weakness, while the rest are consolidating.

The economic agenda is busy with an update on Japan’s monetary policy, later there is data on German GfK consumer climate, German and Spanish preliminary CPI, Spanish unemployment rate, UK realised sales, the EU monetary policy decision and press conference. US data includes durable goods orders, initial jobless claims, goods trade balance, wholesale inventories, pending home sales and natural gas storage – see table below for more details.

Most of the base metals appear to have found bases and are trying to rebound, all to varying levels of success. Aluminium prices are the closest to setting fresh highs with three-month prices recently trading at $1,963 per tonne, when the end-of-March high was at $1,981. Nickel, however, is the one metal still heading lower, with prices reaching $9,215 per tonne this morning. This weakness probably reflects the pick-up in China’s nickel ore/concentrate imports from Indonesia, which helped counter falling imports from the Philippines. On balance we remain mildly bullish for the base metals’ fundamentals but volume on the LME remains low so it may take a pick-up in volume before prices become more directional again.

Gold prices are on a back footing, but they are holding up better than we expected given how the market seems to be less concerned about the French election now. The weaker dollar, however, may be providing extra support. Silver and platinum are looking weaker, while palladium prices continue to hold up well. We would not be surprised to see gold prices weaken further, before resuming the overall up trend.

Metal Bulletin publishes live futures reports throughout the day, covering major metals exchanges news and prices.

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Gold prices hold up relatively well, weaker dollar helping

FastMarkets

Gold and silver prices are little changed this morning with spot prices at $1,263.25 per oz and 17.57 per oz respectively, while the PGMs are firmer by an average of 0.4%. This follows a generally weaker performance yesterday when silver prices fell 1.7%, gold prices fell 1% and platinum prices fell 0.8%, while palladium bucked the trend with a 0.4% rise.

With the market expecting Emmanuel Macron to be the next French president, haven trades are losing their shine, hence bullion prices and the yen are on back footings and that may well remain the case until after the May 7 election – unless geopolitical tensions rise elsewhere.

The base metals traded on the London Metal Exchange are up across the board this morning, Wednesday April 26, with three-month prices up an average of 0.4% led by a 0.8% rise in zinc prices.

Copper prices are up 0.2% at $5,723 per tonne. Volume has, however, been low with 3,754 lots traded as of 06:38 BST. This firmer tone follows a mixed performance on Tuesday, when copper, aluminium and lead prices rose around 1.4%, zinc prices climbed 0.8%, but nickel and tin prices fell around 1%.

 

Metals prices on the Shanghai Futures Exchange are also up across the board, suggesting the wave of weakness that has hit that market in recent weeks may have passed. Prices across the base metals complex are up an average of 0.7% this morning, with lead prices up 1.3% and with zinc and copper prices up 1%, with the latter at 46,360 yuan per tonne.

Spot copper prices in Changjiang are up 0.2% at 46,160-46,310 yuan per tonne and the LME/Shanghai copper arb ratio was trading around 8.10.

In other metals in China, September iron ore futures are up 3.1% on the Dalian Commodity Exchange, while on the SHFE, steel rebar prices are up 2.3%, gold prices are down 0.4% and silver prices are off 0.5%.

In international markets, spot Brent crude oil prices are up 0.1% at $52.03 per barrel and the yield on the US ten-year treasuries has increased to 2.34%.

Equities remained buoyant yesterday with the Euro Stoxx 50 closing up 0.2%, it held on to all of its 4% gain from Monday and the Dax set a fresh all-time high. The Dow closed up 1.1% at 20,996.

The firmer tone has spread through Asia this morning, with the Nikkei up 1%, the ASX 200 is up 0.8%, the Hang Seng is up 0.7%, the Kospi is up 0.6% and the CSI 300 is up 0.3%.

The dollar index has broken below support setting a fresh low for the year at 98.69 yesterday. It was recently quoted at 98.75 – this may help underpin commodity prices. The euro at 1.0946 is pushing higher, sterling at 1.2835 is poised below resistance at 1.2860 – it looks well placed to break higher – while the aussie is weaker at 0.7513, as is the yen at 111.35.

In emerging market (EM) currencies, the yuan is flat at 6.8856, the rupee is strengthening, as is the ringgit, while the rest are either consolidating ,or slightly weaker.

The economic agenda is light today: Japan’s all industries activity climbed 0.7%, after a 0.4% fall previously and later today data on US crude oil inventories is released – see table below for more details.

The base metals are edging higher after recent weakness, nickel and tin seem the two metals struggling to get some lift and as such they remain the most vulnerable. Aluminium prices look the strongest as they have retreated the least in recent weeks, while the rest have pulled back quite far – the pullbacks could be consolidation after the strong gains seen in the fourth quarter last year and in the first part of this year, which is what we think is the case – although sentiment does not seem bullish so this stronger tone in recent days could be a feint move higher. On balance, we still remain friendly towards the base metals’ outlooks and are waiting to see if this upward move attracts more followers.

Gold prices have pulled back from the recent highs, but they are holding up relatively well, especially considering the weaker yen and rebound in sentiment as seen by the rebound in equity prices. The weaker dollar may well be helping to cushion any pullback. Silver and platinum are looking weaker, while palladium prices continue to hold up well.

Overnight Performance BST 06:38 +/- +/- % Lots Cu 5723 9 0.2% 1310 Al 1964 2 0.1% 356 Ni 9325 25 0.3% 1134 Zn 2626.5 21 0.8% 829 Pb 2180 11 0.5% 102 Sn 19610 75 0.4% 23 Average 0.4%       3,754 Gold 1263.24 -0.06 0.0%   Silver 17.57 -0.01 -0.1% Platinum 954.1 2.1 0.2% Palladium 801.5 4.5 0.6% Average PM 0.2%   SHFE Prices 06:39 BST RMB Change % Change Cu         46,360 480 1.0% AL         14,425 95 0.7% Zn         21,695 210 1.0% Pb         16,145 215 1.3% Ni         78,180 70 0.1% Sn       137,670 360 0.3% Average change (base metals)     0.7% Rebar           2,997 67 2.3% Iron ore              511 15.5 3.1% Au              283 -1.05 -0.4% Ag           4,127 -19 -0.5%   Economic Agenda BST Country Data Actual Expected Previous 5:30am Japan All Industries Activity m/m 0.7% 0.8% -0.4%  3:30pm US Crude Oil Inventories -1.1M -1.0M

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FastMarkets

Gold prices are weaker this morning, Monday April 24, on the back of the results of the first round of the French presidential election that has put Emmanuel Macron and Marine Le Pen in the run-off election on May 7. The result has led to some liquidation of haven trades. Spot gold prices are down 0.8% at $1,274.23 per oz, silver and palladium prices are down 0.4% and 0.2%, respectively, while palladium continues to buck the trend with a 1% rise to $799 per oz. This morning’s weakness in prices follows a general down day on Friday, when the precious metals closed down by an average of 0.6%.

Apart from three-month tin prices that are down 0.9% on the London Metal Exchange this morning, the rest of the metals’ prices are ranged between plus and minus 0.3%, with copper prices up 0.3% at $5,652 per tonne.

Volume remains average with 6,701 lots traded as of 06:40 BST. This follows a weaker session on Friday April 21, when the base metals complex closed down 0.9%, led by a 1.7% drop in zinc prices.

Sentiment in China remains largely weak with the base metals on the Shanghai Futures Exchange down an average of 1.1% this morning, the exception is copper that is up 0.2% at 45,880 yuan per tonne, while the rest are down between 0.5% for aluminium and 2.4% for tin. Spot copper prices in Changjiang are up 0.1% at 45,780-45,980 yuan per tonne and the LME/Shanghai copper arb ratio was around 8.11. Last week, the arb window was open at times, which suggests support for copper prices may not be too far away.

In other metals in China, September iron ore futures remain weak with prices down 1.4% on the Dalian Commodity Exchange, while on the SHFE, steel rebar prices are off 1.3%, gold prices are down 0.2% and silver prices are off 0.6%. In international markets, spot Brent crude oil prices are up 0.6% at $52.23 per barrel and the yield on the US ten-year treasuries has climbed to 2.32% as demand for haven bonds has eased.

Equities ended last week little changed to slightly weaker with the Euro Stoxx 50 little changed while the Dow closed down 0.2% at 20,547. In Asia this morning, China’s CSI 300 is off 1.4%, while the weaker yen has given the Nikkei a boost, it is up 1.5%, the Hang Seng is up 0.1%, the ASX 200 is up 0.2% and the Kospi is up 0.3%.

The French election result has led to some fast moves and gap-openings in the currencies with the euro gapping higher to 1.0867, the yen has fallen to 110.22, the dollar index is lower at 99.07, the Australian dollar is stronger at 0.7561 and the sterling is treading water at 1.2787. In emerging market (EM) currencies, the yuan is flat at 6.8857 and most of the other EM currencies we follow are looking stronger with the peso and rand gapping higher.

The economic agenda is light, with German Ifo business climate, a Bundesbank monthly report, UK CBI industrial order expectations, Chinese leading indicators and US Federal Open Market Committee member Neel Kashkari is speaking twice – see table below for more details.

The base metals started to find some strength towards the end of last week but the buyers did not appear to be in any particular hurry, but that may have been due to uncertainty ahead of the French election. Nickel, tin, zinc and lead remain on a back footing, while copper is holding up slightly better and aluminium is for now holding on to most of its gains. With the markets looking more risk-on this morning, we wait to see if that instils some confidence into the base metals – we would expect it to.

Gold prices gapped lower in early trading, which is not surprising and given the first round results in the French election we would expect prices to pull back further for a while, although we do not think it will derail the overall up trend in gold prices. We expect silver and platinum prices to follow gold’s lead, while palladium seems capable of trading its own fundamentals – that said, given we expect a slower auto market this year, we would not be overly bullish for prices at these elevated levels.

Metal Bulletin publishes live futures reports throughout the day, covering major metals exchanges news and prices.

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Gold prices consolidate recent gains, expect increased volatility around the French election

FastMarkets

Gold and the rest of the precious metals prices are little changed this morning, Friday April 21, with spot gold prices at $1,280.13 per oz. This comes after a mixed performance on Thursday that saw spot gold prices climb 0.2%, silver prices drop 0.7%, while the PGMs were strong with platinum prices up 1.2% to $975 per oz and palladium prices rose 3.5% to $802 per oz.

Base metals prices have managed to generally build on the gains from Thursday with three-month London Metal Exchange prices up an average of 0.4%, this morning.

Lead prices lead the way with a 0.9% rise, while tin prices buck the trend with a 0.5% drop to $19,810 per tonne, while the rest are up between 0.3% for nickel and 0.8% for zinc. Copper prices are up 0.4% at $5,657 per tonne. Volume has been above average with 7,249 lots traded as of 06:42 BST

Sentiment in China has tended to be bearish in recent weeks, but today was an up day across the board with prices up an average of 1.2%, led by a 3% rally in zinc prices. Tin lagged behind with a 0.2% gain, while the rest were up between 0.6% for lead and 1.2% for aluminium. Copper was up 0.9% at 45,860 yuan per tonne. Spot copper prices in Changjiang are up 0.5% at 45,720-45,920 yuan per tonne and the LME/Shanghai copper arb ratio was trading around 8.11. We mentioned in Thursday’s report that there were some reports of some arb trading on Wednesday, so with prices rebounding today some bargain hunting may be materialising.

In other metals in China, September iron ore futures have rebounded strongly with gains of 7.3% on the Dalian Commodity Exchange, while on the Shanghai Futures Exchange, steel rebar prices are up 3.5%, gold prices are little changed and silver prices are off 0.8%. In international markets, spot Brent crude oil prices are little changed at $52.98 per barrel and the yield on the US ten-year treasuries is slightly firmer at 2.24%.

Equities also took on a firmer tone on Thursday with the Euro Stoxx 50 closing up 0.6% and the Dow closed up 0.9% at 20,578. Asia this morning has generally seen follow through buying, with the Nikkei up 1.1%, helped by a weaker yen, the Kospi is up 0.8%, the ASX 200 is up 0.7%, the Hang Seng is up 0.1%, while the CSI 300 bucks the trend with a 0.3% drop.

The dollar index at 99.81 is slightly firmer than this time on Thursday as US Treasury Secretary Steven Mnuchin breathed life back into US president Donald Trump’s reflation trade. This weighed on other currencies with the euro slipping to 1.0713, sterling’s rally has paused at 1.2809 and the yen has eased to 109.37, while firmer iron ore prices has given the Australian dollar, at 0.7534, some strength. In emerging market (EM) currencies, the yuan is flat at 6.8832 and most of the other EM currencies we follow are holding within recent ranges.

The economic agenda is busy today, Japan’s flash manufacturing PMI climbed to 52.8 from 52.4. Later there is PMI data out across Europe and the US, plus data on the EU current account, UK retail sales and US existing home sales. Speakers include UK Monetary Policy Committee member Michael Saunders and US Federal Open Market Committee member Neel Kashkari, it is also day one of an International Monetary Fund meeting. Although there is no flash Chinese PMI data out, the update on manufacturing in Europe and the US should provide further insight into how the global economy is doing.

Dip-buying appears to have emerged into the recent weakness in base metals prices, this fits in with our overall view to remain mildly bullish for the complex. What will be interesting now is to see if there is follow through buying and whether that starts to unnerve the shorts that have added to positions in recent weeks. Political uncertainty in the short term may keep potential buyers on hold.

Gold prices are consolidating recent gains as higher prices are unsurprisingly prompting some profit-taking, as at the end of the day Marine Le Pen is unlikely to be the next French president, but given the surprise over Brexit and the US election, there will be a lot of uncertainty and nervousness until the final vote is known. As such, we expect increased volatility in the days and weeks ahead, especially as other geopolitical events are running in parallel. Silver, platinum and palladium, are generally holding up well, although they too have seen some profit-taking. The strong rebound in palladium suggests strong underlying demand.

Metal Bulletin publishes live futures reports throughout the day, covering major metals exchanges news and prices.

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Gold prices consolidate as high prices attract profit-taking

FastMarkets

Gold and silver prices are little changed this morning, Thursday April 20, with spot gold prices at $1,279.60 per oz, although the PGMs are up an average of 0.4%, but this comes after a generally weaker day on Wednesday that saw the complex closed down an average of 0.6%. With gold prices already having run higher in recent weeks on the back of political and geopolitical uncertainty, we are not surprised that there is some profit-taking to be absorbed and the market is likely to remain volatile as we pass through the French presidential elections.

Base metals prices were weaker again this morning, with three-month prices on the London Metal Exchange down an average of 1% as of 06:38 BST, with zinc and lead prices off the most with losses of 1.6% and 1.5%, respectively, copper prices are off 0.7% at $5,557 per tonne, while aluminium prices are off the least with a 0.2% drop to $1,908.50 per tonne. Prices have since started to rebound.

Volume has been above average with 7,311 lots traded. This morning’s earlier weakness came after a generally stronger day on Wednesday that saw prices closed up an average of 1.1% – so the series of up down days with an overall downward bias continues.

Sentiment in China remains bearish as seen by the persistent retreat across the metals, both base and industrial. That said, not all base metals prices on the Shanghai Futures Exchange are weaker this morning, zinc and lead that have been some of the weaker metals are up 0.4% and 1.2%, respectively, which suggests a degree of bargain hunting. The rest of the metals are, however, continuing to show weakness with aluminium prices falling 1.2%, tin prices are down 0.7%, nickel prices are down 0.5% and copper prices are off 0.9% at 45,200 yuan per tonne. Spot copper prices in Changjiang are down 0.9% at 45,470-46,670 yuan per tonne and the LME/Shanghai copper arb ratio was trading around 8.11. There were reports of some arb trading on Wednesday, which is another early sign that some bargain hunting may be materialising.

In other metals in China, September iron ore futures have continued to fall, they are down 2.3% on the Dalian Commodity Exchange, while on the SHFE, steel rebar prices are down 1.4%, gold prices are off 0.2% and silver prices are down 0.4%. In international markets, spot Brent crude oil prices are little changed at $53.12 per barrel, although that is after a much weaker day on Wednesday and the yield on the US ten-year treasuries is weaker at 2.21%.

Equities were mixed on Wednesday with the Euro Stoxx 50 closing up 0.3%, but the Dow closed down 0.6% at 20,404. Asia this morning, however, is firmer with the Nikkei up 0.1%, the Hang Seng is up 0.4%, the CSI 300 and ASX 200 are up 0.2% and the Kospi is up 0.5%. Asian equities seem to be taking comfort from better Japanese trade data that showed a pick-up in imports and exports. Earlier in the month, China also reported better exports and imports, all of which bodes well for global growth.

The dollar index is at 99.69, it seems to be consolidating recent weakness, the low on Wednesday was 99.46. In line with this consolidation, other currencies are treading water too with the euro at 1.0727, the pound sterling at 1.2813, the Australian dollar at 0.7506 and the yen at 108.92. In emerging market (EM) currencies, the yuan is weaker at 6.8857and most of the other EM currencies we follow are on a back footing, especially the Mexican peso, while the South African rand is rebounding after the recent weakness.

On the economic calendar today there is data on German PPI, US Philly Fed manufacturing, initial jobless claims, leading indicators and Natural gas storage. There is also data on EU consumer confidence and two speeches from Bank of England governor Mark Carney and one from US Treasury Secretary Steven Mnuchin – see table below for more details.

The tone in the base metals is not bullish at present and we put that down to the market adjusting from being too bullish after the US election and earlier this year. The higher prices attracted hoarded metal out of the woodwork and that is having to be absorbed and while that is happening upward momentum has been lost. In turn, that has prompted stale long liquidation and some short selling. The degree to the weakness being seen is metal dependent with zinc, lead, nickel and tin, all falling further than copper and aluminium. We would say the bearishness is momentum based, while the underlying fundamentals remain bullish if anything. As such we would run with the weaker trend for now, but expect them to turn higher before too long, especially as better Chinese and Japanese trade data suggest the global economy is improving.

Gold prices have already rallied as geopolitical tensions are running higher, higher prices are not surprising prompting some profit-taking, as at the end of the day Marine Le Pen is unlikely to be the next French president, but given the surprised over Brexit and the US election, there will be a lot of uncertainty and nervousness until the final vote is known. As such, we expect increased volatility in the weeks ahead, especially as other geopolitical events are running in parallel. Silver, platinum and palladium, are generally holding up well, but weakness in other industrial metals seems to be weighing on sentiment to some extent.

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Gold prices hold up, expect increased volatility

FastMarkets

Gold prices are holding up well this morning, Wednesday  April 19, with spot prices little changed at $1,289 per oz, silver prices are off 0.4% at $18.21 per oz, while the PGMs are up around 0.5%. This follows a general day of weakness on Tuesday that saw gold and platinum prices little changed, while silver prices closed down 1.1% and palladium prices closed off 2.5%.

Bounces have been seen across the base metals prices on the London Metal Exchange this morning, with prices up an average of 0.6% as of 06:30 BST.

Volume has been above average with 10,328 lots traded, with more zinc traded, 3,427 lots, than copper, 3,385 lots. This comes after another day of weaker prices on Tuesday that saw prices close down an average of 2.6%, led by a 5.5% drop in lead prices, but also saw falls of around 3.8% in nickel and zinc prices. The decline in metal prices in recent weeks has tended to be interspersed with up days, so we would not read too much into today’s firmer tone just yet.

Base metals prices on the Shanghai Futures Exchange are down again this morning, with prices off an average of 2%, led by a 2.9% drop in zinc prices. Given the rebound in LME prices this morning, the weakness in SHFE implies prices are reacting to Tuesday’s weakness on the LME. June copper prices are off 0.8% at 45,920 yuan per tonne and spot copper prices in Changjiang are down 0.6% at 45,870-46,070 yuan per tonne and the LME/Shanghai copper arb ratio was trading around 8.13, meaning the arb window remains closed.

In other metals in China, September iron ore futures have continued to fall, they are down 1.5% on the Dalian Commodity Exchange, while on the SHFE, steel rebar prices are down 1%, gold prices are unchanged and silver prices are off 1.1%. In international markets, spot Brent crude oil prices are little changed at $54.75 per barrel and the yield on the US ten-year treasuries is weaker at 2.19%.

Equities were weaker on Tuesday with weaker commodity prices, including oil, and some poor earnings weighing on sentiment too. The Euro Stoxx 50 closed down 1.1% and the Dow closed off 0.6% at 20,523. The weaker tone has generally flowed through to Asia this morning, where the Hang Seng is off 0.6%, the CSI 300 is down 1.1%, the ASX 200 is off 0.5%, although the Nikkei is up 0.2%, helped by a pause in the yen’s run of strength.

The dollar index dropped to a low of 99.49 yesterday, it was weakened by falling inflation expectations on the back of weaker oil and commodity prices and as some disappointment seeped into sentiment about the US administration’s ability to push through with stimulative policy. Currencies firmed as a result, with the euro at 1.0717, the pound sterling climbed to 1.2824, it was bid higher on the back of the election announcement, but the Australian dollar weakened to 0.7523 and the yen at 108.67 is consolidating. In emerging market currencies, the yuan is firmer at 6.8777 and most of the other currencies we follow are consolidating.

The focus on the economic calendar today is likely to be EU CPI data, there is also data on the Italian and EU trade balances and in the USA there is data on the crude oil inventories and the Beige book – see table below for more details.

The short-to-medium term trends in most of the base metals remain downward with zinc, lead and nickel seeing steep declines and considerable chart damage, while copper’s trend is sideways-to-down, tin still seems to be consolidating after its December/February weakness, while aluminium’s trend remains strong. The loss of upside momentum in most of the metals since mid-February has increased the chance of stale long liquidation and downward trends will increase the risk of short selling too. Overall, we see these pullbacks as an adjustment to running ahead of the fundamentals since the US presidential election – we continue to expect the fundamentals to strengthen and therefore expect dips to attract bargain hunting.

Gold prices remain strong as geopolitical tensions are running high and are likely to remain so ahead of the French presidential election. After the first vote, we would expect increased volatility until the second vote. Silver prices are generally following gold’s lead, but the weakness in industrial metals seems to be weighing on prices too, palladium also seems to have run into overhead supply, while platinum prices are starting to look more supported and robust European vehicle registrations should provide support.

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Gold prices up on heightened political and geopolitical concerns

FastMarkets

Gold and silver prices are consolidating, down 0.2% and 0.1% respectively this morning, Thursday April 13, with spot gold prices at $1,283.92 per oz, having been as high as $1,288, while the PGMs are up around 0.2%. However on Wednesday, gold and silver prices climbed 0.9%, platinum prices were up 0.4%, while palladium prices dropped 0.5%.

The base metals are rebounding this morning after what has been a week or so of weaker prices. On average the base metals are up an average of 1.4%, spread between gains of 1.1% for aluminium and 1.8% for tin, with three-month copper prices up 1.6% at $5,714 per tonne. Volume has been strong with 10,537 lots traded as of 06:45 BST. This comes after a 1.2% average drop on Wednesday. The question now is whether today’s rebound was short-covering ahead of the long Easter weekend or whether dip-buying has started.

In Shanghai this morning, base metals prices are mixed, copper prices are down 0.9% at 46,200 yuan per tonne, nickel prices are down 1%, aluminium and tin prices up 0.2%, while lead prices are up 1% and zinc has rebounded 2.1%. Spot copper prices in Changjiang are down 1.4% at 45,820-46,020 yuan per tonne and the LME/Shanghai copper arb ratio has weakened again to 8.06, which indicates the rebound has so far been seen in LME prices more than in Shanghai – again this could be a sign of short-covering as the LME will be closed on Friday and Monday.

In other metals in China, September iron ore futures have rebounded after earlier weakness, they are up 0.5% on the Dalian Commodity Exchange, while on the Shanghai Futures Exchange, steel rebar prices are up 0.4%, gold prices are up 0.7% and silver prices are up 1.1%. In international markets, spot Brent crude oil prices are up 0.5% at $55.84 per barrel and the yield on the US ten-year treasuries has eased further to 2.24%, another sign that money is shifting to safety.

Equities were slightly weaker on Wednesday with the Euro Stoxx 50 closing down slightly, while the Dow closed down 0.3% at 20,591. This morning, Japan is showing more concern as the stronger yen hurts exporters, which has seen the Nikkei drop 0.7%. The ASX 200 is weaker by 0.8%, the CSI 300 and Hang Seng are up 0.2% and the Kospi is up 0.7%.

The dollar index accelerated lower following comments from US President Donald Trump that he thought the dollar had risen too much since his election victory, the index has fallen to 100.08. The euro has rebounded recently at 1.0672, as has the Australian dollar at 0.7594, while the sterling at 1.2570 and the yen at 109.04 are rallying.

In emerging markets, the yuan has rebounded, it was recently quoted at 6.8700 and most other emerging market currencies are strengthening too – all a countermove against a weaker dollar, but also suggests a rebound in confidence, which may well help to continue support a rebound in the metals too.

Data out already showed a pick-up in China’s trade surplus with exports and imports both picking up, which suggests a healthier global economy. Later there is data out on CPI in France and Germany, leading indicators in the UK, with US data showing PPI, University of Michigan consumer sentiment and inflation expectations and natural gas storage – see table below for more details.

The base metals have been on a back footing with prices pulling back to test support levels, many of which have given way, this has especially been the case in zinc and copper where prices fell to levels not seen since early-January. Given the loss of upward momentum since February it is not so surprising that stale long liquidation has been seen and the drifting trends have attracted some short selling too. The higher prices earlier in the year had attracted scrap and hoarded metal out of the woodwork, which will have needed to be absorbed – another reason why prices have been capped in recent months.

Key now will be whether bargain hunting starts to emerge, we are after all still in the early stages of the seasonally strong second quarter. Also with Trump and Chinese president Xi Jinping, appearing to have had constructive meetings last week, it seems less likely that trade wars will materialise, which again will help foster global growth. As such, we remain quietly bullish for the base metals.

Gold prices remain strong as geopolitical tensions are running higher and because the countdown to the French presidential election is now on, with the first round on April 23. Silver prices broke higher on Wednesday, while the PGMs are back at the higher levels of their recent ranges.

Metal Bulletin publishes live futures reports throughout the day, covering major metals exchanges news and prices.

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Gold prices struggle to hold on to gains

FastMarkets

Spot gold prices are up 0.1% this morning, Monday April 10, at $1,254.44 per oz, this follows a 0.2% gain on Friday, palladium prices are off 0.4% at $797.80 per oz, while silver and platinum prices are little changed.

Base metals prices on the London Metal Exchange remain under pressure this morning with three-month prices down an average of 0.2%.

Zinc and lead prices are up marginally, while copper and nickel prices lead with declines of 0.6% and 0.5%, respectively. Three-month copper prices were quoted at $5,813 per tonne as of 06:45 BST and volume across the base metals has been above average with 7,105 lots traded.

In Shanghai this morning, base metals prices are for the most part weaker, nickel prices are bucking the trend with a 0.3% gain, while the rest are down an average of 1.6% ranged between a 3.8% fall in lead prices and a 0.1% fall in aluminium prices. Copper prices are off 1.3% at 47,030 yuan per tonne. Spot copper prices in Changjiang are off 1% at 46,920-47,120 yuan per tonne and the LME/Shanghai copper arb ratio has eased to 8.02.

In other metals in China, September iron ore futures continue to weaken; they are down 1.9% on the Dalian Commodity Exchange. While on the SHFE, steel rebar prices are up 1.5%, gold prices are down 0.4% and silver prices are off 1.8%. In international markets, spot Brent crude oil prices are up 0.5% at $55.46 per barrel and the yield on the US ten-year treasuries has edged up to 2.38%.

Equities were firmer in Europe on Friday with the Euro Stoxx 50 closing up 0.2% but disappointing non-farm employment numbers saw the Dow closed slightly lower. Asia this morning is mixed with the Nikkei up 0.8%, the Hang Seng is little changed, the ASX 200 is up 0.8%, the Kospi is down 0.8%, while the CSI 300 is off 0.1%.

The dollar index is climbing again, it was recently quoted at 101.20, the euro is little changed at 1.0590, sterling is weaker at 1.2390, the yen is strong at 111.38, while the Australian dollar is weak at 0.7493. In emerging markets, the yuan is weaker at 6.9066 and most other emerging market currencies are either flat, or weaker.

The economic agenda is fairly light today, Japan’s economic watchers sentiment dropped to 47.4 from 48.6, later there is data on Italian industrial production, EU Sentix investor confidence, US labour market conditions and this evening US Federal Reserve chairwoman Janet Yellen is speaking – see table below for more details.

The firmer tone in the base metals that was seen on Tuesday/Wednesday last week attracted selling over the last two days of the week and prices are under pressure again this morning, with lead and zinc prices looking the weakest, while the others seem to be in consolidation mode. One of the features of the base metals markets in recent months has been that the upside has been capped and that seems to remain the case. The other feature has been that dips have been supported and that now looks set to be tested again.

Gold prices got a haven boost early on Friday following the US missile strike against Syria, but prices did not hold on to the gains. As such, spot gold prices are trading sideways, while silver and palladium prices are correcting lower and platinum prices remain subdued. On balance, we expect gold prices to remain well supported as attention focuses on the French election.

Metal Bulletin publishes live futures reports throughout the day, covering major metals exchanges news and prices.

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FastMarkets

Given the geopolitical developments with the USA attacking a Syrian air base, base metals prices have been little affected, although precious metals are up, while in China, iron ore and steel prices have fallen heavily.

Gold prices jumped 1.4% this morning to a high of $1,269.40 per oz, setting a fresh high for the year. As of 06:28 BST the precious metals were up between 0.7% for palladium prices and 1% for gold prices, with silver and platinum prices up 0.9%. This morning’s gains came after a down day on Thursday, when the complex closed down an average of 0.4%.

Base metals prices on the London Metal Exchange this morning, Friday April 7, are up an average of 0.1%, with three-month copper prices off 0.1% at $5,872 per tonne and tin prices are off 0.2%, while the rest of the metals are ranged from little changed on nickel to up 0.3% for aluminium and lead prices. Volume has been above average with 5,980 lots. On balance, prices are consolidating after selling emerged on Thursday afternoon that was thought to be driven by Chinese fund selling.

In Shanghai this morning, base metals prices are for the most part weaker, tin prices are bucking the trend with a 0.7% gain, while the rest are down an average of 1.3% ranged between a 0.5% fall in aluminium prices and a 1.9% drop in zinc prices. Copper prices are off 0.7% at 47,620 yuan per tonne. Spot copper prices in Changjiang are off 0.2% at 47,420-47,670 yuan per tonne and the LME/Shanghai copper arb ratio has eased to 8.12.

In other metals in China, September iron ore futures have plunged, prices are down 7.1% on the Dalian Commodity Exchange, while on the SHFE, steel rebar prices are down 5.1% and gold and silver prices are up around 1.3%. In international markets, spot Brent crude oil prices are up 1.4% at $55.63 per barrel and the yield on the US ten-year treasuries are around 2.31%.

Equities were firmer on Thursday with the Euro Stoxx 50 up 0.5% and the Dow closed up around 0.1%. Equities in Asia this morning are generally firmer too, which is surprising given the geopolitical developments. The Nikkei is up 0.8%, the Hang Seng is down 0.5%, the ASX 200 is up 0.1%, the CSI 300 is up 0.3% and the Kospi is off 0.2%.

The dollar index rallied on Thursday, but it has slipped today to 100.61. The yen has strengthened to 110.47, while the euro and sterling are little changed and the Australian dollar is falling, it was recently quoted at 0.7523, no doubt weakened by the rapid fall in iron ore prices. In emerging markets, the yuan is weaker at 6.8940 and most other emerging market currencies are either flat, or weaker, with the exception of the rupee that has strengthened further to 64.407.

It is a key day for economic data with the focus on the US monthly employment report. Data out already, includes Japan’s average cash earnings, leading indicators, German industrial production and trade balance, see table below for more details. Data out later includes French industrial production, Italian retail sales, UK manufacturing and industrial production, construction output and in addition to the US employment report, there is also US data out on wholesale inventories and consumer credit. Additionally, Bank of England governor Mark Carney and US Federal Open Market Committee member William Dudley are speaking.

The firmer tone in the base metals that was seen on Tuesday and Wednesday attracted selling on Thursday afternoon that hit all the markets, but particularly nickel and zinc. One of the features of the base metals markets in recent months has been that the upside has been capped and that seems to remain the case. The other feature has been that dips have been supported and that now looks set to be tested again, especially in lead and zinc – indeed lead prices are already dropping through some support levels. With the pick-up in geopolitical tension and with the US employment report being released this afternoon, we expect choppy trading today.

Gold prices got a haven boost overnight, which set fresh highs for the year, we should now get an update on how bullish sentiment is to see if there is follow-through buying. On balance, we would not be surprised if the market struggles to hold on to these gains, but we would expect dips to remain well supported.

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PALLADIUM TODAY: Prices hold up in high ground

Short Term: Medium Term: Long Term: Resistances: R1 815 March high R2 816 High so far R3 833 HRL March 2015 peak R4 911.50 HRL Sept 2014 peak Support: S1 796.50 Former resistance S2 787 20 DMA S3 741 Feb 3 low Stochastics:Bearish-to-neutral Legend: DMA – daily moving average Fibo – Fibonacci retracement line (H)SL – (horizontal) support line HRL – horizontal resistance line Technical Comment Analysis Prices are consolidating while they absorb selling, having broken up through resistance at $797 per oz on Thursday March 23 and then setting a fresh high at $816 on April 5 – the highest since May 2015.  The overall trend looks strong. The recent low was above the January low at $711 per oz and well above the UTL, which is now at $710 per oz, suggesting good underlying support. Judging by the previous peaks ahead of $800 per oz, it looks as though there was scale-up producer selling above the market. Now prices have moved up through $800, we wait to see where the next selling levels are. The long-term chart (not shown) shows a band of supply running up to $833 per oz, which is likely to be the next target.  Macro factors ETF investors have returned as light buyers in recent days, but generally interest seems good in the metal, which is surprising considering the strong upward price trend.  With palladium’s use tied to the automotive market, we are wary about the metal’s timing in pushing higher; if anything, the Chinese automotive sector looks set to weaken after a very strong 2016 while US auto sales have also come off the boil slightly. Conclusion Palladium’s bull market has followed a choppy path for most of 2016, involving some large pullbacks along the way; this pattern seems to have rolled into 2017 too. Until recently, better economic data pointed to a stronger demand outlook; but although we expect general economic data to continue to improve, we also expect some slowdown in the auto industry, especially in China, but also in Europe and the USA. We have said we are not overly bullish about palladium prices at these levels unless investor interest picks up considerably. If ETF and funds do not start to increase exposure, we would be cautious about this breakout. All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.

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Gold price edges lower amid robust US data

Gold prices fell on Thursday April 6 while positive US data continued to weigh on prices.

The spot gold price was recently quoted at $1,253.90/1,254.20 per oz, down $2.05 on the previous close. Trade has ranged from $1,252.55 to $1,259.00 so far.

In US data released on Wednesday, the ADP non-farm employment change showed 263,000 joined the US labour force in March, far exceeding the forecast of 184,000.

“Robust ADP labour market data for March point to a positive official US labour market report tomorrow. In addition, there were rising stock markets and a somewhat firmer US dollar,” Commerzbank noted.

“Gold continues to hold range-bound amid a firming US economy battling against global uncertainty, with the 200 DMA still weighing upon the metal and restricting further top-side gains,” MKS said.

“Investors now turn their focus to the upcoming meeting between President Donald Trump and his counterpart President Xi Jinping, while Friday’s US jobs data looms to provide further market direction. Gold sees initial support around $1,250 [per oz], while below this $1,240 should see strong interest,” the broker added.

Silver, PGMs

• The spot silver price was recently quoted at $18.220/18.245 per oz, little changed from the previous close.
• Platinum was down $2 at $955/960 and palladium fell $4 to $800/805 per oz.

Currency moves and data releases

• The dollar index was at a fairly steady 100.58.
• In data, China’s Caixin services PMI dropped to 52.2 from 52.6, Japan’s consumer confidence climbed to 43.9 from 43.1 and German factory orders climbed 3.4%.
• Data out later includes the EU retail PMI, UK housing equity withdrawal, ECB monetary policy meeting accounts, US Challenger job cuts, initial jobless claims and natural gas storage. In addition, European Central Bank president Mario Draghi is speaking.

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PALLADIUM TODAY: New price highs

Short Term: Medium Term: Long Term: Resistances: R1 573 Dec 2015 high R2 635 Apr 2016 high R3 682 50% Fibo 2014>2016 drop ($911-452) R4 711 200 DMA R5 724-729 Former spike lows R6 727 Oct 3, 2016 high R7 735 61.8% Fibo 2014>2016 drop ($911-452) R8 747 Aug 10 high R9 785 20 DMA R10 776.50 Dec 1 high R11 797 Jan 24, 2017 high R12 798-833 Resistance band Sep 2014-May 2015 R13 803 May 2015 high R14 815 YTD high Support: S1 785 20 DMA S2 779 40 DMA S3 751 100 DMA S4 735 61.8% Fibo 2014>2016 drop ($911-452) S5 724-27 Aug-Oct high/late-Nov support S6 723 UTL of Jan/Feb 2016 lows S7 682 50% Fibo 2014>2016 drop ($911-452) S8 635 Apr 2016 high S9 611 61.8% Fibo Jun>Aug rally S10 499 DTL from Sep 2014 S11 452 2016 low Stochastics:Turning lower Legend: BB – Bollinger band DMA – daily moving average Fibo – Fibonacci retracement level MACD – moving average convergence divergence U/DTL – up/downtrend line Technical Comment Analysis Palladium reached a fresh two-year high at $816 per oz on Wednesday April 5 but it continues to meet stiff overhead resistance, most probably from pent-up scrap supply. The market continues to work through overhead pressure between $797 and $833 per oz, which capped prices between September 2014 and May 2015. Clearance would target resistance at $848-863 from February-August 2011. Immediate support is seen from the 20, 40 and 55 DMAs, which are between $781 and $773. Further support is expected around the mid-March lows around $740 per oz and should be reinforced by UTL support from early 2016 at $723 and the 200 DMA at $709. Macro factors Palladium also set new highs in rand terms yesterday. Rand-denominated palladium has surged by 16% since mid-March; the South African currency has slumped amid fresh political in-fighting and after ratings agency Standard & Poor’s downgraded the nation’s rating to junk status. This could compound long-term headwinds facing producers in the country.   Net length among Nymex speculators increased by 12,367 contracts or 13% in the week to March 28. Net length of 20,532 contracts is up 6,346 contracts or 45% in the year to date. Last week’s increase was driven by a 2,695-contract increase in open longs, offsetting a 598-contract rise in open shorts. Speculative longs remain elevated while short exposure remains low, suggesting palladium is vulnerable to long liquidation or from wider re-engagement by shorts. Global vehicle sales growth was strong last year, supporting rising demand for emission control devices. Passenger vehicle sales in the three largest markets (the USA, China and the EU) increased 8.5% in 2016 to 56.5 million vehicles. But we believe sales will grow far more modestly in 2017; sales in China are forecast to climb a further 5% in 2017 to 29.4 million vehicles while sales in Europe are forecast to grow only 1% due to political and economic uncertainties. Passenger vehicle sales in China increased 6.3% in January-February and by 6.2% year-on-year in Europe. Sales in the USA contracted by 1.5% year-on-year in the first quarter. ETF holdings stand at 1.558 million oz compared with a recent low of 1.522 million oz. Given their price sensitivity, we are surprised strong rand-palladium prices have not triggered long liquidation from investors in the country, suggesting they have become less bearish.   Palladium’s fundamentals will continue to improve – fallout from Volkswagen’s Dieselgate scandal will lead to a shift away from diesel-powered vehicles in Europe. Carmaker Renault has suggested diesels could disappear from most of its European car range. Palladium is starting to be used more in diesel auto-catalysts also. Nornickel – the world’s largest palladium producer – reported that palladium output from its own Russian feed totalled 609,000oz in the fourth quarter of 2016, down 1% quarter-on-quarter. Full-year output from the company’s own Russian feed totalled 2.518 million oz, slightly above forecast but down 2% year-on-year due to lower ore grades and the reconfiguration of downstream production. Nornickel has an output guidance of 2.63-2.73 million oz for 2017. Johnson Matthey forecasts another year of substantial deficit in the global palladium market in 2017, with demand set to continue to outstrip growth in supply despite rising supply from recycling. This will build on the 651,000-oz deficit in 2016 forecast by Johnson Matthey. It sees total supply rising 1% to 9.03 million oz – a near-10% increase in recycling volumes will offset static mine production. Palladium demand from the auto-catalyst sector will increase 2% to 7.8 million oz, fuelled by growth in sales of petrol-powered cars. Conclusion Our outlook for palladium remains little changed. Robust fundamentals and strong speculative buying are buoying prices but gains are being kept in check by stiff resistance. This is most likely to be from pent-up scrap material but the strength in rand-denominated palladium prices will also give a boost to producers in the country. We feel there is an increasing danger of speculative investors becoming despondent unless palladium can vault the $798-833 per oz resistance band and push to new highs. All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.

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PLATINUM TODAY: Trying higher, but struggling

Short Term: Medium Term: Long Term: Resistances: R1 915 DTL (broken at) R2 955 20 DMA R3 1,029 Feb 9 peak R4 1,045.50 Recent high R5 1,090 May 2016 peak R6 1,195 Aug 2016 peak R7 1,289 Jan 2015 peak Support: S1 955 20 DMA S2 948 61.8% Fibo (Dec-Feb rally) S3 940 Mar 31 low S4 932 Mar 15 low S5 911 Feb low/HSL S6 889 Dec low S7 811 Jan low S8 807 Support 2004 S9 745 2008 low Stochastics:Turns bullish Legend: BB – Bollinger band DMA – daily moving average Fibo – Fibonacci retracement level (H)SL – (horizontal) support line H&S – head-and-shoulder(s) pattern U/DTL – up/downtrend line Technical Comment Analysis Platinum prices rebounded after the significant sell-off that severely dented this year’s rally. The correction took prices below the 61.8% Fibo of this year’s rally and got close to the December base and the long-term UTL.  The recent rebound ran out of steam, but support was found and prices are edging higher again. The stochastics have higher again. With gold prices holding just below this year’s highs and palladium prices recently setting fresh highs for the year, platinum prices are looking particularly weak.  Macro factors The Nymex net length dropped for a fourth straight week, falling 1,326 contracts in the week to March 28 to 27,629 contracts. The decline was driven by short-selling and long liquidation. With the gross long fund position relatively low and the gross short position climbing, it is not surprising that prices are struggling. But the build-up in the short position raises the risk of short-covering at some stage, especially with gold prices still looking strong. The global platinum market will remain in a structural deficit for a sixth consecutive year in 2017, according to the latest forecast by the World Platinum Investment Council (WPIC). It sees the market in a 120,000-oz deficit this year, slightly deeper than the 100,000-oz deficit forecast previously; the market was in a 270,000-oz deficit in 2016. This reflects revisions to its demand expectations – it now sees global demand contracting by 6% to 7.78 million oz from the 2% contraction forecast previously amid lower demand from the automotive, industrial and investment sectors, alongside weaker jewellery consumption, which is now forecast to contract. The WPIC forecasts total global supply to record a downwardly revised 4% decline, owing to a drop in refined and secondary supply. Conclusion After the recent sharp pullback, platinum prices may be able to edge higher. The fundamentals are supportive, prices are relatively low and the overall economic climate is mildly bullish, although we have concerns that the major auto market may struggle for growth as strong growth has been seen over the past 18 months or so. On balance, though, we are bullish for gold prices, which should support platinum prices too, especially because they remain at a significant discount ($290 per oz) to gold prices. All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.

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GOLD TODAY: Prices edging higher to challenge resistance

Short Term: Medium Term: Long Term: Resistances: R1 1,233 20 DMA R2 1,249 50% Fibo Jul-Dec sell-off R3 1,263.90 Feb 27 high R4 1,290 DTL R5 1,308 Support: S1 1,239.80 Recent low S2 1,233 20 DMA S3 1,210 38.2% Fibo Dec Feb rally S4 1,195 Mar 10 low Stochastics:Bullish Legend: BB – Bollinger band DMA – daily moving average Fibo – Fibonacci retracement level H&S – head-and-shouder pattern HRL – horizontal resistance line R/SL – resistance/support line UTL – uptrend line Technical Comment Analysis Spot gold prices have rebounded strongly after the sharp retreat between February 27 and March 10. Prices have climbed back to $1,261.05 per oz – they dipped briefly before pushing higher again. Resistance is now seen at $1,261.05 per oz and at the February high at $1,263.90. The 20 DMA had rolled over to the downside but it has since started to trend higher again.  The stochastics are holding up in high ground. Although they had crossed lower, they are now crossed higher again. We still think gold prices are emerging into a bull market although so far prices have climbed only 12.5% above the December low; a 20% move is deemed necessary to qualify as a bull market. That would require a move to $1,347 per oz, which is still a long way away. Macro picture CFTC data on Friday March 31 showed strong buying in the week to March 28, with 8,120 extra long positions added while 13,448 shorts covered. This has taken the net long fund position to 137,820 contracts, up from a recent low of 106,038 contracts on March 14.   Political uncertainty in Europe and the USA alongside the potential for other markets to get disappointed about the reflation (or Trump) trade seem to be the driving factors supporting firm gold prices.  The fact gold prices are rising in tandem with the dollar is also a strong sign that there is safe-haven buying interest around. Conclusion We remain bullish for gold and expect safe-haven buying to remain strong ahead of the looming French presidential election. All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.

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PALLADIUM TODAY: Eyeing fresh highs again

Short Term: Medium Term: Long Term: Resistances: R1 815 Mar 23 high Support: S1 780 20 DMA S2 772 50 DMA S3 749 100 DMA Stochastics: Legend: BB – Bollinger band DMA – daily moving average DTL – downtrend line Fibo – Fibonacci retracement level H&S – head-and-shoulder(s) pattern RL – resistance line RSI – relative strength index SL – support line UTL – uptrend line Technical Comment Analysis Palladium prices continue to consolidate from recent gains, having found technical support from the December 2016 low UTL (see daily chart). The pullback has been mild and the metal is trading well above all the key moving averages. As such, its technical configuration indicates that bulls are still in control. However, the current rally runs on a negatively diverging daily RSI which warns that the bullish momentum is running on borrowed time. We feel it could continue to diverge while palladium prices continue to edge higher. But it will take either a technical and/or fundamental trigger to potentially unleash the pent-up selling pressure. Meanwhile, the stochastic lines have already turned lower and it is likely to take both the fast and slow line to bearish territory as selling interest picks up a notch. Against such technical backdrop, we will remain cautiously bullish and will not be surprised to see prices to continue edging higher before a corrective sell-off occurs. Macro drivers Global vehicle sales growth remains buoyant this year which supports the stronger consumption of palladium used to produce emission control devices. Both European and Chinese sales enjoyed strong growth in 2016, with sales of passenger vehicles in the two markets surging by 6.8% and 13.7%, respectively. The robust macroeconomic conditions into 2017 has remain favourable for global demand for industrial metal, such as palladium, to maintain its bullish momentum. But there is real concern over the decline in US sales numbers as well as lower forecasts of sales growth at only 5% in China and 1% in Europe. A significant risk-off events could unravel the strong run-up in palladium prices, we feel. Nonetheless, the global palladium market remains in structural deficit. As such, it continues to bode well for prices to remain elevated and has the platform to advance higher given the strong global demand for palladium from the autocatalyst sector. Nymex speculators maintained their bullish outlook towards palladium as fresh selling of 598 contracts fails to offset fresh buying of 2,965 contracts. Its net long fund position (NLFP) rose for the second consecutive week. On the ETF front, investors added 1,524 oz and took net holdings to 1.56moz as of April 3.  Conclusion So far, palladium has been the best performing metal out of gold, silver and platinum. Its robust price action and bullish fundamental backdrop has set the metal apart as it advanced to a higher high within the uptrend channel formed since the January 2016 low. We remain friendly toward the metal but cautious that any trigger of a corrective sell-off could put the bullish conviction under immense pressure.  All trades or trading strategies mentioned in the report are hypothetical, for illustration only and do not constitute trading recommendations.

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