METALS MORNING VIEW 31/08: Pick-up in China’s PMI data fails to excite base metals prices

The rebounds in the base metals have paused in recent days; we wait to see if the better-than-expected Chinese official manufacturing purchasing managers’ index (PMI) acts as a boost as we approach September and the end of the summer slowdown.

The PMI edged up to 51.3 in August from 51.2 in July, but it also came in better than the 51.0 that was expected.

Three-month base metals prices on the London Metal Exchange were for the most part in positive territory on the morning of Friday August 31, led by a 2% gain in zinc ($2,513 per tonne), a 1.2% rally in lead ($2,099 per tonne) and a 0.7% rise in aluminium ($2,143 per tonne). The rest were little changed with nickel prices up 0.1%, while tin and copper were both down by 0.2%, with the former at $6,063 per tonne.

Volume has been high at 10,636 lots traded as at 06.47am London time.

This morning’s performances follow a general down day on Thursday, where only tin prices closed higher with a gain of 0.8%, while the rest were down by an average of 1%.

Precious metals prices were up across the across the board with gains averaging 0.8%, ranged between 0.4% for spot gold at $1,204.47 per oz and 1.2% for palladium at $977.40 per oz.

In China, base metals prices on the Shanghai Futures Exchange were mixed with the October contracts for zinc and lead and the January contract for tin up by an average of 1.1%, while October contracts for copper and aluminium and the November contract for nickel were down by an average of 0.7%. The most actively traded October copper contract was recently quoted at 48,610 yuan ($7,126) per tonne.

Spot copper prices in Changjiang were down by 03% at 48,530-48,770 yuan per tonne and the LME/Shanghai copper arbitrage ratio was at 8.02.

In other metals in China, the January iron ore contract on the Dalian Commodity Exchange was up by 1.1% at 486.50 yuan per tonne. On the SHFE, the January steel rebar contract was down by 1.2%, while the December gold contract was up by 0.1% and the December silver contract was down by 0.5%.

In wider markets, spot Brent crude oil prices are moving higher again and were recently quoted at $77.94 per barrel, up by 0.29% this morning. Falling crude oil stocks and the potential for US sanctions against Iranian oil are in focus and existing financial sanctions against the country are already impacting Iran’s ability to trade. The yield on US 10-year treasuries was at 2.8556%, while the German 10-year bund yield was at 0.3453%.

Asian equity markets were mixed on Friday: Nikkei (unchanged), Kospi (+0.38%), the ASX200 (-0.51%), the Hang Seng (-0.92%) and the CSI 300 (-0.39%). This follows a weaker performance in western markets on Thursday; in the United States, the Dow Jones closed down by 0.53% at 25,986.92, while in Europe the Euro Stoxx 50 closed down by 0.73% at 3,430.99. The weakness seems to be driven by a combination of the potential for an escalation in the scale of US tariffs against China and increasing weakness in some emerging market currencies.

The dollar index is on a back footing this morning as it consolidates in low ground around 94.63. On the chart, the move above 95.66 on August 10 suggested the index had triggered a bullish Head and Shoulders Pattern, but failure to pusher again soon could start to make it look toppy.

With the base metals prices trading inversely to the dollar, the direction of the dollar remains all important.

With the dollar consolidating in low ground the other major currencies we follow are either extending gains or are consolidating around recent highs: sterling (1.3023), the euro (1.1682), the Australian dollar (0.7254) and the yen (110.99).

The yuan is also consolidating and was recently quoted at 6.8296, but most of the emerging market currencies we follow are either weakening, or consolidating in, or near, low ground. The exception is the Mexican peso that is consolidating in mid-ground.

The economic agenda is busy today, with a lot of data out already: Japanese data looked mixed and German retail sales came in worse than expected with a 1.4% fall – see table below for details. Data out later includes French, Italian and the European Union’s consumer price index (CPI), Italian and EU unemployment rates, with US data including the Chicago PMI and the University of Michigan consumer sentiment and inflation expectations.

For the most part, the base metals’ rally off the mid-August lows are now consolidating so it is too early to say whether they are just pausing, or whether selling is starting to dominate again at the higher price levels. Lead looks the most likely to extend gains, while nickel looks to be in the weakest position.

Overall, on the basis of recent oversold prices, large short positions, relatively healthy long-term fundamentals and a pick-up in physical interest, we do favor the upside from these levels, but the market may need to build more of a base before buyers are prepared to chase prices higher. The next batch of manufacturing PMI data that is out on September 3 is likely to set the direction.

The most of precious metals are following the path of the base metals, which suggests they are also following the dollar and overall market sentiment – the exception is palladium that is powering ahead with its rebound that has seen prices rally 18% from the mid-August low.

The post METALS MORNING VIEW 31/08: Pick-up in China’s PMI data fails to excite base metals prices appeared first on The Bullion Desk.

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Target Price on Metals Producer Stays Constant Despite Revised Commodities Price Deck

A report provides ROTH Capital Partners' new estimates for gold, silver and other metals throughout 2018 and net effect on the financial projections of this miner.

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Goldcorp Raising Stake to 13.6% of Advanced-Stage Nevada Gold Explorer

Up to 5,121,950 common shares are to be placed, with gross proceeds of up to CA$10.5 million.

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Explorer Finding High Grades by Sampling Historical Core

The company expects to release an updated resource estimate on its Mexico project by the end of the year.

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Gold Explorer Announces Assay Results from Metallurgical Core Drilling

The Goldstrike Oxide Gold Project is located in the Great Basin of the U.S.

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Jack Chan's Weekly Precious Metals Market Update

In his weekly precious metals market update, technical analyst Jack Chan charts the latest moves in the gold and silver markets.

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METALS MORNING VIEW 28/08: Follow-through buying still evident after metals extend rebound gains

Three-month base metals prices on the London Metal Exchange were for the most part in positive territory on the morning of Tuesday August 28, with nickel prices bucking the trend with a 0.2% decline, while the rest were up by between 0.2% for copper at $6,082 per tonne and 0.7% for zinc at $2,545 per tonne.

Volume has been above average with 8,473 lots traded as at 07.23am London time.

This morning’s general firmness follows a firmer performance last Friday that saw the complex close up by an average of 1.1%, with only tin ending the day in negative territory.

Precious metals prices were up across the across the board with gains averaging 1.1% – led by a 2.3% rise in platinum prices, while spot gold prices were up by 0.4% at $1,210.10 per tonne.

In China, base metals prices on the Shanghai Futures Exchange were mixed with the October contracts for copper and aluminium down by 0.4% and 0.3% respectively, while the rest of the base metals were showing gains of between 0.1% and 0.5%. The most actively traded October copper contract was recently quoted at 48,570 yuan ($7,123) per tonne.

Spot copper prices in Changjiang were down by 0.4% at 48,520-48,670 yuan per tonne and the LME/Shanghai copper arbitrage ratio was weaker at 7.99 after 8.09 last Friday.

In other metals in China, the January iron ore contract on the Dalian Commodity Exchange was down by 0.7% at 481 yuan per tonne. On the SHFE, the January steel rebar contract was down by 0.6%, while the December gold and silver contracts were up by 0.3% and 0.2% respectively.

In wider markets, spot Brent crude oil prices were up by 0.68% at $76.11 per barrel this morning. The yield on US 10-year treasuries was weaker at 2.8464%, while the German 10-year bund yield at 0.3700% was firmer.

Asian equity markets were for the most part stronger on Tuesday: Nikkei (+0.06%), Kospi (+0.17%), the ASX200 (+0.57%) and the Hang Seng (0.24%), while the CSI 300 dipped by 0.2%. This follows a stronger performance in western markets on Monday; in the United States, the Dow Jones closed up by 1.01% at 26,049.64, while in Europe the Euro Stoxx 50 closed up by 0.83% at 3,456.01.

The dollar index is on a back footing this morning and was recently quoted at 94.86, which extends last Wednesday’s low of 94.93. On the chart, the move above 95.66 on August 10 suggested the index had triggered a bullish head and shoulder pattern, so we need to be wary about how far this pullback in the index goes, as it could just be testing the validity of the breakout.

With the base metals prices trading inversely to the dollar, any resumption of the dollar’s bull market could further weigh on metals’ prices, while if the breakout fails and the dollar weakens then that could be supportive.

Despite the dollar drifting, most of the other major currencies we follow are still consolidating: sterling (1.2868), the euro (1.1670), the Australian dollar (0.7324) and the yen (111.22).

The yuan is firmer and was recently quoted at 6.8147, but most of the emerging market currencies we follow are consolidating in, or near, low ground. Despite the United States-Mexico Trade Agreement, the peso is also consolidating at around 18.8320.

On the economic agenda, data out already shows the Bank of Japan’s core consumer price index (CPI) rising 0.5%, up from 0.4% previously. Later we have the European Union’s M3 money supply and private loans data along with US releases that include goods trade balance, preliminary wholesale inventories, composite house prices, consumer confidence and Richmond Manufacturing Index.

For the most part, the base metals’ rally off the mid-August lows continues; the exceptions are nickel and tin where prices are consolidating above recent lows. The next key economic data as far as the metals are concerned is probably China’s manufacturing purchasing managers’ index (PMI), but that is not out until Friday, so we wait to see if the rebound can last until then.

Overall, on the basis of oversold prices, large short positions, relatively healthy long-term fundamentals and a pick-up in physical interest, we do favor the upside from these levels, but the market may need to build more of a base before buyers are prepared to chase prices higher.

The precious metals are following the path of the base metals, which suggests they are also following the dollar and overall market sentiment.

The post METALS MORNING VIEW 28/08: Follow-through buying still evident after metals extend rebound gains appeared first on The Bullion Desk.

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METALS MORNING VIEW 24/08: Rebounds underway in most of the metals

Three-month base metals prices on the London Metal Exchange were for the most part in positive territory on the morning of Friday August 24, with tin prices bucking the trend with a 0.3% decline, while the rest were up by between 0.2% for aluminium and 1.1% for lead. The three-month copper contract was up by 0.8% at $6,014 per tonne.

Volume has been high with 9,953 lots traded as at 07.31am London time.

This morning’s general weakness follows a mixed performance on Thursday that saw some polarized price moves with nickel down by 2.5% and lead closing up by 2.2%, copper off by 0.8% and tin down by 0.6%, while zinc and aluminium were up by 0.1% and 0.2% respectively.

Precious metals prices were up across the across the board with gains averaging 0.6% – led by a 1.1% rise in platinum prices, while spot gold prices were up by 0.3% at $1,188.97 per tonne.

In China, base metals prices on the Shanghai Futures Exchange were for the most part firmer, the exception being nickel where prices were off by 0.9%. The rest were up by an average of 1.4%, led by a 2.6% gains in the October lead and zinc contracts. The most actively traded October copper contract was up by 0.8% at 48,630 yuan ($7,072) per tonne.

Spot copper prices in Changjiang were up by 0.4% at 48,380-48,580 yuan per tonne and the LME/Shanghai copper arbitrage ratio was weaker at 8.09 after 8.11 on Thursday.

In other metals in China, the January iron ore contract on the Dalian Commodity Exchange was up by 0.1% at 489.50 yuan per tonne. On the SHFE, the January steel rebar contract was down by 07%, while the December gold and silver contracts were down by 0.2% and 0.3% respectively.

In wider markets, spot Brent crude oil prices were up by 0.60% at $75.15 per barrel this morning. The yield on US 10-year treasuries was firmer at 2.8291%, as was the German 10-year bund yield at 0.3450%.

Asian equity markets were for the most part stronger on Friday: Nikkei (+0.85%), CSI 300 (+0.53%), Kospi (+0.46%, the ASX200 (+0.05%), while the Hang Seng is bucking the trend with a 0.15% decline. This follows a weaker performance in western markets on Thursday; in the United States, the Dow Jones closed down by 0.30% at 25,656.98, while in Europe the Euro Stoxx 50 closed down by 0.03% at 3,419.26.

The dollar index is consolidating this morning and was recently quoted at 95.48, after Wednesday’s low of 94.93. On the chart, the move above 95.66 on August 10 suggested the index had triggered a bullish head and shoulder pattern, so we need to be wary about how far the recent pullback in the index goes, as it could just be testing the validity of the breakout. With the base metals prices trading inversely to the dollar, any resumption of the dollar’s bull market could further weigh on metals’ prices.

With the US dollar consolidating and slightly weaker, most of the other major currencies we follow are also consolidating: sterling (1.2827), the euro (1.1570), the Australian dollar (0.7282), but the yen is weaker at 111.35.

The yuan is also weaker and was recently quoted at 6.8846, as are most of the emerging market currencies we follow, especially the Brazilian real (4.1122) amid political uncertainty ahead of elections that is undermining confidence.

On the economic agenda, data out already shows Japan’s core consumer price index (CPI) rising 0.8% and services producer price index (PPI) rise 1.1%, both unchanged from previous readings, while Germany’s final gross domestic product (GDP) increased by 0.5%, which was also unchanged.

Data out later includes high street lending from the United Kingdom and US durable goods orders. In addition, UK Monetary Policy Committee member Andrew Haldane and US Federal Reserve Chairman Jerome Powell are speaking at the central bankers’ meeting at Jackson Hole in the US state of Wyoming.

In recent reports we wondered whether the rally in the base metals was just another “dead-cat bounce” – the market seems undecided as aluminium, lead and zinc prices are continuing to extend rebound gains, while the rebounds in copper, nickel and tin prices stalled on Thursday. With US-China trade talks ending without any breakthrough the markets are likely to remain nervous. Today, with the long weekend ahead for the UK and therefore the LME, there may be some book squaring and firmer prices as a result.

Overall, on the basis of oversold prices, large short positions, relatively healthy long-term fundamentals and a pick-up in physical interest, we do favor the upside from these levels, but the market may need to establish a base before buyers are prepared to chase prices higher.

The precious metals are following the path of the base metals, which suggests they are also following the dollar and overall market sentiment.

The post METALS MORNING VIEW 24/08: Rebounds underway in most of the metals appeared first on The Bullion Desk.

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METALS MORNING VIEW 23/08: Metals prices consolidate; markets awaiting direction from PMI data, Chinese trade talks

Three-month base metals prices on the London Metal Exchange were mainly down on the morning of Thursday August 23, with lead prices bucking the trend with a 0.2% rise, while the rest were off by between 0.5% for aluminium and 1.5% for nickel. The three-month copper contract was down by 1.2% at $5,941 per tonne.

Volume has been high with 11,053 lots traded as at 07.37am London time.

This morning’s general weakness follows a mixed performance on Wednesday that saw copper prices fall 0.8%, gains in zinc and tin of 1.3% and 0.9% respectively, while the rest were little changed.

Precious metals prices were weaker across the board with prices down by an average of 0.6%, with spot gold prices off by 0.4% at $1,192.10 per oz.

In China, base metals prices on the Shanghai Futures Exchange also gave a varied performance this morning; the October lead and zinc contracts were up by 1.7% and 1.2% respectively, while the rest of the complex was weaker, with the most actively traded October contract down by 0.8% at 48,160 yuan ($7,037) per tonne.

Spot copper prices in Changjiang were down by 0.9% at 48,130-48,400 yuan per tonne and the LME/Shanghai copper arbitrage ratio was firmer at 8.11 after 8.08 on Wednesday.

In other metals in China, the January iron ore contract on the Dalian Commodity Exchange was down by 1.4% at 486.50 yuan per tonne. On the SHFE, the January steel rebar contract was down by 07%, while the December gold contract was up by 0.3% and the December silver contract was down by 0.4%.

In wider markets, spot Brent crude oil prices were down by 0.50% at $74.49 per barrel this morning. The yield on US 10-year treasuries was weaker at 2.8144%, while the German 10-year bund yield was firmer at 0.3410%. The minutes from the Federal Open Market Committee (FOMC) showed a Fed on course to continuing tightening monetary policy, but they did discuss whether they have room to act should another recession get underway. In addition, they noted a key risk was if the trade wars escalated.

Asian equity markets were mixed on Thursday: Nikkei (+0.22%), Hang Seng (-0.43%), CSI 300 (+0.38%), Kospi (+0.41%) and the ASX200 (-0.34%). This follows a similarly mixed performance in western markets on Wednesday; in the United States, the Dow Jones closed down by 0.34% at 25,733.60, while in Europe the Euro Stoxx 50 closed up by 0.25% at 3,420.18.

The dollar index is rebounding this morning and was recently quoted at 95.32, after Wednesday’s low of 94.93. On the chart, the move above 95.66 on August 10 suggested the index had triggered a bullish head and shoulder pattern, so we need to be wary about how far the recent pullback in the index goes, as it could just be testing the validity of the breakout. With the base metals prices trading inversely to the dollar, any resumption of the dollar’s bull market could further weigh on metals’ prices.

With the US dollar firmer, most of the other major currencies we follow are weaker: sterling (1.2878), the euro (1.1568), the Australian dollar (0.7295) and the yen (110.80).

The yuan is also weaker and was recently quoted at 6.8682, while most of the emerging market currencies we follow are also slightly weaker.

The economic agenda is heavy today, with data out already showing Japan’s flash manufacturing purchasing managers’ index (PMI) edged higher to 52.5 from an upwardly revised 52.3 and previous print of 51.6. Later there is flash manufacturing and services data out across Europe and the US. In addition, there is data on UK realized sales, US initial jobless claims, Chinese leading indicators, US house prices and new home sales, EU consumer confidence and US natural gas storage.

In addition, Germany’s Bundesbank President Jens Weidmann is speaking and day one of the central bankers’ meeting at Jackson Hole in the US state of Wyoming gets underway.

In recent reports we wondered whether the rally in the base metals was just another “dead-cat bounce” and the weakness in copper, nickel and tin suggests it may be. That said, today’s PMI data is likely to set the tone as are the US-China trade talks that get underway in Washington.

Overall, on the basis of oversold prices, large short positions and relatively healthy long-term fundamentals, we do favor the upside from these levels, but the market may need to establish a base before buyers are prepared to chase prices higher.

The precious metals are following the path of the base metals, which suggests they are also following the dollar and overall market sentiment.

The post METALS MORNING VIEW 23/08: Metals prices consolidate; markets awaiting direction from PMI data, Chinese trade talks appeared first on The Bullion Desk.

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METALS MORNING VIEW 22/08: Metal price rebounds halt, markets waiting for new direction

Base metals prices were mixed on the London Metal Exchange on the morning of Wednesday August 22, with weakness seen in copper, lead and zinc, while nickel and tin prices increased and aluminium remained unchanged.

Copper was down by 0.6%, lead down 0.2% and zinc down 0.9%, while nickel was up 0.8% and tin up 0.3%. Three-month copper prices were recently quoted at $6,027 per tonne.

Volumes have been average, with 5,775 lots traded as at 07.10am London time.

This morning’s consolidation follows a general day of firmness, with the base metals complex closing up by an average of 1.1%.

Precious metals prices were slightly weaker, with gold, silver and platinum prices all off by 0.1%. Spot gold was at $1,194.45 per oz, while palladium prices fell 0.4%. This follows a day of gains for gold and silver prices on Tuesday, with prices up either side of 0.4%, while the platinum group metals were weaker.

In China, base metals prices on the Shanghai Futures Exchange were in positive territory as took their direction from Tuesday’s LME session.

Prices were up by an average of 0.7%, with gains of 0.3% for aluminium and 1.4% for tin. The most actively traded October copper contract was up by 0.5% at 48,690 yuan ($7,114) per tonne.

Spot copper prices in Changjiang were up by 0.1% at 48,650-48,780 yuan per tonne and the LME/Shanghai copper arbitrage ratio was firmer at 8.08 after 8.02 on Tuesday.

In other metals in China, the January iron ore contract on the Dalian Commodity Exchange was down by 0.7% at 493.50 yuan per tonne. On the SHFE, the January steel rebar contract was up by 0.6%, while the December gold and silver contracts were up by 0.3% and 0.1% respectively.

In wider markets, spot Brent crude oil prices were up by 0.10% at $72.86 per barrel this morning. The yield on US 10-year treasuries was little changed at 2.8269%, while the German 10-year bund yield was firmer at 0.3205%.

Asian equity markets were for the most part firmer on Tuesday: Nikkei (0.09%), Hang Seng (0.52%), CSI 300 (1.85%), Kospi (0.99%) while the ASX200 was off by -0.96%. This follows a firmer performance in western markets on Tuesday; in the United States, the Dow Jones closed up by 0.25% at 25,822.29, while in Europe the Euro Stoxx 50 closed up by 0.53% at 3,411.66.

The dollar index is consolidating and was recently quoted at 95.31, after last Wednesday’s peak of 96.99. On the chart, the move above 95.66 on August 10 suggested the index had triggered a bullish head and shoulder pattern, so we need to be wary about how far the recent pullback in the index goes, as it could just be testing the validity of the breakout. With the base metals prices trading inversely to the dollar, any resumption of the dollar’s bull market could further weigh on metals’ prices.

With the US dollar consolidating, most of the other major currencies we follow are also consolidating around recent highs: sterling (1.2901), the euro (1.1565), the Australian dollar (0.7342) and the yen (110.41).

The yuan is also consolidating and was recently quoted at 6.8430 after having been as weak as 6.9347 on August 15. And most of the emerging market currencies we follow are consolidating, although the Brazilian real has weakened to a multi-year low of 4.0481.

The economic agenda is light today. Japan’s all-industries activity fell 0.85 after a 0.1% gain previously and data out later includes US existing home sales, crude oil inventories and the Federal Open Market Committee (FOMC) minutes. Thursday will be an important data day, when the flash manufacturing PMIs are released.

For now, the political developments in the US over some of US president Donald Trump’s team are not having too much of a negative impact on market sentiment, but that could change as the day unfolds.

This evening’s FOMC minutes are expected to remain hawkish, but if they show signs of concern over the potential impact of US trade policies and are less hawkish than expected, that could be negative for the dollar and therefore supportive of metal prices.

For now, the base metals price recoveries are on hold, so we wait to see if the recent strength is just another dead-cat bounce – we expect Thursday’s flash manufacturing PMI data to provide some direction.

Overall, on the basis of oversold prices, large short positions and relatively healthy long-term fundamentals, we do favor the upside from these levels, but the market may need to establish a base before buyers are prepared to chase prices higher.

The precious metals are following the path of the base metals, which suggests they are also following the dollar and overall market sentiment.

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Exploration on Brazilian Gold Project Identifies High-Priority Target

An auger drill campaign is returning some of the highest values seen so far on the project.

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Back Up the Truck

Precious metals expert Michael Ballanger explains why he believes the tides may be changing for precious metals.

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