Zinc: The Bulls Are Circling and Major Miners Are Hungry

Ron Struthers, editor of Struther's Resource Stock Report, profiles a zinc company that he is bullish on.

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Good News for Chile, Bad News for the US

Technical analyst Clive Maund analyzes why the rising copper price is good news for Chile.

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Gold Explorer with Past-Producing, Fully Permitted Arizona Mine Surges

A past-producing mine in Arizona comes back to life with a new, well-financed and disciplined management team.

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METALS MORNING VIEW: Base metals prices edge up in high ground

After some consolidation at the end of last week, further strength has returned to the base metals this week, with copper prices pushing the envelope on the upside, while the rest of the complex has also seen prices head back towards recent highs.

This morning, Wednesday August 30, base metals prices on the London Metal Exchange are up by an average of 0.4%, led by a 1% rise in zinc, while three-month copper prices are up 0.4% at $6,831 per tonne. Volume has been average with 7,842 lots traded as of 06:55 BST.

This morning’s continued strength follows a strong day on Tuesday when the complex closed up with average gains of 1.5%, led by a 2.6% gain in lead and a 2.3% rise in aluminium.

Precious metals prices are consolidating this morning after strong gains seen on Monday; gold and silver prices are little changed with spot gold at $1,310.80 per oz, while the PGMs are up by between 0.1% and 0.2%. This follows a day of price correction for bullion on Tuesday with gold and silver prices both down by 0.6%, while the PGMs were both up by 0.4%.

On the Shanghai Futures Exchange (SHFE) this morning, lead prices are in the driving seat with gains of 2.4%, copper, aluminium and zinc prices are up between by 0.2% and 0.5%, with copper at 52,800 yuan ($8,013) per tonne, while nickel prices are off by 0.8% and tin prices are down by 0.6%. Spot copper prices in Changjiang are off by 0.2% at 52,440-52,620 yuan per tonne and the LME/Shanghai copper arb ratio is weaker at 7.32.

Steel rebar prices on the Shanghai Futures Exchange are weaker, down by 1.6%, gold prices are off by 0.3% and silver prices are up by 0.1%, while January 2018 iron ore prices on the Dalian Commodity Exchange are down by 1.7% at 553.50 yuan per tonne.

In international markets, spot Brent crude oil prices are off 0.1% at $51.88 per barrel and the yield on US ten-year treasuries is weaker at 2.15% as is the German ten-year bund yield at 0.36% – both a sign that haven demand is strong, as indeed gold portrays.

Equities in Asia are mainly stronger this morning – gains are being seen on the Hang Seng (0.93%), the Nikkei (0.74%), the Kospi (0.22%), the CSI 300 (0.1%), while the ASX 200 is little changed. In the USA, the Dow Jones closed up 0.26% at 21,865.37 and in Europe, the Euro Stoxx 50 closed down 0.96% at 3,388.22.

The dollar index at 92.48 is rebounding after Tuesday’s drop to 91.62, the weakness on the back of falling bond yields, which in turn appear to be a factor of the impact of Hurricane Harvey and the escalation in tension over North Korea. Any rebound that gathers momentum could check the rallies in the metals. Conversely, the euro at 1.1955 has pulled back from Tuesday’s 1.2070 high, sterling at 1.2915 is under pressure again, the yen at 110.11 is weaker, while the Australian dollar at 0.7965 is stronger.

Emerging market currencies are for the most part flat, although the yuan is strong at 6.5911 – the strongest it has been since June 2016 – this suggests a vote of confidence in the economy and how the government is handling it.

On the economic agenda, Japan’s retail sales growth dipped to 1.9%, after 2.2%, but it beat the expected 1%. Later there is data on German and Spanish CPI, UK data on lending, US ADP non-farm pay rolls, preliminary GDP, GDP prices and crude oil inventories. In addition, US Federal Open Market Committee member Jerome Powell is speaking.

Copper prices have had a strong run to the upside and although we remain bullish, the current up leg is looking quite stretched now, so some consolidation seems likely, especially if the dollar rebounds. The rest of the metals have been consolidating in high ground for some time, so they may be ready to push higher and catch up with copper’s lead. Although all prices, with the possible exception of tin, are in high ground so we should expect scale-up forward selling and profiting-taking to make the upside going more of a struggle. This in turn increases the risk of corrections – key will be how well the dips are supported. On balance, we remain bullish for the base metals complex, but would not be surprised to see some consolidation.

Gold prices had been challenging the high ground below $1,300 per oz but had struggled to break higher, but the escalation in tension over North Korea provided the catalyst and the break higher looks bullish medium term. Short term there may need to be some consolidation and perhaps a test of the breakout level around $1,300 per oz. Silver is following gold’s lead, but is not looking as bullish, palladium prices continue to look stronger, but prices are already very high, while platinum prices are looking stronger and remain relatively weak to those of gold and palladium.

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

The post METALS MORNING VIEW: Base metals prices edge up in high ground appeared first on The Bullion Desk.

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Yukon Gold Developer 'In a Good Position to Scale Up Construction'

This Canadian miner broke ground on development of its flagship gold project, paving the way for commencement of production in 2019, and also has stepped up exploration on a neighboring prospect.

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A Very Good Day for Gold

Clive Maund analyzes what happened yesterday in the gold market.

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Shifting the Narrative

Precious metals expert Michael Ballanger discusses gold's breakout and its correlation to the U.S. dollar and cryptocurrencies.

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New Maiden Resource Could Lift Value of Gold Miner

Analyst Andrew Kaip with BMO Capital Markets upgraded his rating and target price on this Canadian gold company after modeling the impact of an upcoming estimated resource on its overall production.

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Jack Chan's Weekly Gold and Silver Market Update

Technical analyst Jack Chan charts the latest moves in the precious metals markets.

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METALS MORNING VIEW: Jackson Hole likely to dictate direction

The rallies in the base metals on the London Metal Exchange have generally continued in early trading today, Friday August 25, with prices up by an average of 0.4%, with aluminium, zinc, lead and copper prices up between 0.6% to 0.8%, while nickel is off 0.5% and tin is little changed. Three-month copper prices are at $6,740 per tonne.

This morning’s stronger tone follows a broadly weaker performance on Thursday when copper prices rallied 1.7%, while lead prices slipped 1.2%, aluminium and nickel were off by around 0.4% and zinc and tin were little changed.

Precious metals prices are up across the board this morning with gains averaging 0.3%, silver leads the gains with a 0.4% rise to $16.98 per oz, the platinum group metals (PGM) are both up by 0.3% and gold prices are up by 0.1% at $1,286.60 per oz.

On the Shanghai Futures Exchange (SHFE) this morning, lead prices are once again bucking the trend, they are down by 0.2%, while the rest are up between 0.1% for tin and 1.7% for copper, which was recently quoted at 52,630 yuan ($7,896) per tonne. Spot copper prices in Changjiang are up by 1.4% at 52,220-52,400 yuan per tonne and the LME/Shanghai copper arb ratio is weaker at 7.81 (down from 7.83 on Wednesday).

Steel rebar and iron ore prices in China continue to rebound after Wednesday’s weakness; SHFE rebar prices are up by 3% and iron ore prices on the Dalian Commodity Exchange are up by 0.3% at 585.50 yuan per tonne on the January 2018 contract, while gold and silver prices on SHFE are off by 0.2% and 0.3% respectively.

In international markets, spot Brent crude oil prices are up by 0.8% at $52.53 per barrel, concerns over hurricane Harvey in the Gulf of Mexico have lifted oil prices. The yield on US ten-year treasuries is firmer at 2.19% and the German ten-year bund yield is little changed at 0.38%.

Equities in Asia are mainly stronger this morning – gains are being seen on the CSI 300 (1.6%), the Hang Seng Index (+1.1%), the Nikkei (+0.5%) and the Kospi (+0.1%), while the ASX 200 is little changed. In the USA, the Dow Jones closed down 0.1% at 21,783.40 and in Europe, the Euro Stoxx 50 closed up 0.2% at 3,444.73.

The dollar index at 93.41 is consolidating above low ground, with the market waiting to hear what messages emerge for the central bankers’ meeting at Jackson Hole. The euro at 1.1780 and the Australian dollar at 0.7913 are also consolidating, while the yen at 109.67 is slightly weaker as is sterling at 1.2801. The yuan at 6.642 is firm, while the other emerging market currencies we follow are little changed.

On the economic agenda, Japan’s CPI picked up, while services PPI dropped, Germany’s final GDP was unchanged at 0.6%, while import prices eased 0.4%, compared with a 1.1% fall previously. Later there is data on German Ifo business climate. US data included durables goods orders, while the focus will be on speeches by US Federal Reserve chair Janet Yellen and European Central Bank president Mario Draghi at the Jackson Hole Symposium.

Price strength and consolidation seems to be the order of the day in the base metals, with tin and lead remaining the laggards. Given the overall upward momentum, we would not be surprised to see prices rise further, but as prices are in high ground we should expect bouts of forward selling and profit-taking to lead to choppy trading – key will be how well the dips are supported. On balance, we remain bullish for the base metals complex.

Precious metals prices are consolidating in high ground and gold, silver and PGM prices are holding up well for now. Given the geopolitical undercurrent that is not surprising for gold, but the PGMs may be more vulnerable to price corrections, especially palladium.

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

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Canadian Miner 'Flush With Cash' Producing and Expanding in Nevada

A miner with spending money just increased its fleet and made another giant leap forward in expanding its already producing Nevada project.

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