Broadway Gold Ramps Up Exploration at Madison Mine

Broadway Gold Mining has recently begun both surface and underground mining at its Madison Mine, advancing exploration at the historic gold-copper project in the Butte-Anaconda mining district of...

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Alkane in Position to Benefit from Hafnium Demand Rise

Hafnium may not be a household word, but demand for the element is growing, and Alkane Resources is gearing up to take advantage.

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Gold prices hold up well considering dollar strength

FastMarkets

The precious metals are little changed this morning, Thursday March 2, spot gold prices are off 0.2% at $1,244.45 per oz and palladium prices are up 0.2% at $774.80 per oz. On Wednesday, palladium prices were up 0.8%, silver prices were up 0.5%, while platinum prices were down 0.4% and gold was up 0.1% at $1,247.10 per oz.

The base metals on the London Metal Exchange are consolidating Wednesday’s gains this morning,  with prices off an average of 0.3%, with copper the only metal in positive territory at $6,019 per tonne, the rest are off between 0.3-0.4%.

Volume has been light at 4,282 lots as of 06:59 GMT. This morning’s consolidation comes after a day of gains that averaged 1.2% across the base metals on Wednesday, which was led by a 2.4% gain in three-month lead prices to $2,302 per tonne.

In Shanghai this morning, the base metals on the Shanghai Futures Exchange are up an average of 0.9%, with gains seen across the board, led by a 1.6% rise in lead prices, followed by a 1% rise in tin prices, with aluminium and copper up the least, with gains of 0.7%. April copper was recently quoted at 48,650 yuan per tonne, while spot copper in Changjiang was up 0.2% at 48,270-48,470 per tonne. The LME/Shanghai copper arb ratio is at 8.09, meaning the arb window remains closed.

In other metals in China, May iron ore prices are off 0.1% on the Dalian Commodity Exchange, on SHFE steel rebar prices are up 0.8%, gold prices are down 0.2% and silver prices are off 0.3%. In international markets, spot Brent crude oil prices are off 0.1% at $56.19 per barrel and yields on 10-year US treasuries are at 2.4594%.

Equities had a bullish day on Wednesday in the aftermath of US president Donald Trump’s speech and in light of generally bullish economic data that showed Chinese manufacturing PMI beat expectations, EU manufacturing PMI slightly below expectations, but still showing a healthy 55.4 and ISM manufacturing PMI jumping to 57.7 from 56. The Euro Stoxx 50 climbed 2.1%, the Dow climbed 1.5% and breached the 21,000 level and most markets are upbeat in Asia this morning. The Nikkei is up 0.8%, the Kospi is up 0.5%, the Hang Seng is up 0.3%, the ASX 200 is up 1.3%, although the CSI 300 is down 0.7%.

In FX, the dollar is rising with the dollar index at 101.90, helped by a more bullish US Fed talk even from those Federal Open Market Committee members who tend to be dovish. The euro is weaker at 1.0530, as are the sterling at 1.2282, the yen at 114.11 and the Australian dollar is treading water at 0.7657. In China the yuan is also weaker at 6.8848, but other emerging market currencies are slightly firmer which implies the dollar strength is against other major currencies and that emerging markets are not too perturbed about the prospect of higher US interest rates.

Today is another busy day for data, last night US total vehicle sales came in at 17.6 million units, annualised, which was unchanged from January. This morning, German import price data showed a rise of 0.9%, later there is data on Spanish, Italian and EU employment, UK construction PMI, EU CPI and PPI. US initial jobless claims, Challenger job cuts and natural gas storage. Later there is data out on Japanese CPI and unemployment – see table below for more details.

Aluminium extended gains on Wednesday, the other base metals were firmer but still seem to be capped by overhead supply, no doubt encouraged by the firmer dollar that is lifting metals’ prices denominated in other currencies. But, given good data we would not be surprised to see prices continue to work higher. Effervescent equity markets mean bullish sentiment is running high, there are risks of reality checks, but until then the path of least resistance is to the upside.

Given the strength in other markets and the dollar, combined with a rising expectation for a March US rate rise, it is not surprising that the precious metals are facing headwinds, but the fact prices are holding up well suggests strong underlying support – we expect dips will continue to be well supported.

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

Overnight Performance GMT 06:59 +/- +/- % Lots Cu 6019 7 0.1% 1271 Al 1937 -5 -0.3% 1317 Ni 11000 -35 -0.3% 492 Zn 2851.5 -11.5 -0.4% 923 Pb 2294 -8 -0.3% 264 Sn 19450 -75 -0.4% 15 Average   -0.3%        4,282 Gold 1244.45 -2.65 -0.2%   Silver 18.384 0.004 0.0% Platinum 1012.9 -0.1 0.0% Palladium 774.8 1.8 0.2% Average PM 0.0%     SHFE Prices 06:58 GMT RMB Change % Change Cu 48650 340 0.7% AL 14125 95 0.7% Zn 23235 195 0.8% Pb 18840 290 1.6% Ni 91120 680 0.8% Sn 147600 1530 1.0% Average change (base metals) 0.9% Rebar 3544 28 0.8% Iron ore 694 -0.5 -0.1% Au 279.55 -0.6 -0.2% Ag 4287 -11 -0.3%     Economic Agenda GMT Country Data Actual Expected Previous Wednesday US Total Vehicle Sales 17.6M 17.7M 17.6M 7:00am Germany German Import Prices m/m 0.9% 0.5% 1.9%  8:00am Spain Spanish Unemployment Change 5.2K 57.3K 9:00am Italy Italian Monthly Unemployment Rate 12.0% 12.0% 9:30am UK Construction PMI 52.2 52.2 10:00am EU CPI Flash Estimate y/y 1.8% 1.8% 10:00am EU Core CPI Flash Estimate y/y 0.9% 0.9% 10:00am EU PPI m/m 0.5% 0.7% 10:00am EU Unemployment Rate 9.6% 9.6% 12:30pm US Challenger Job Cuts y/y -38.8% 1:30pm US Unemployment Claims 243K 244K 3:30pm US Natural Gas Storage -5B -89B 11:30pm Japan Household Spending y/y -0.3% -0.3% 11:30pm Japan National Core CPI y/y 0.0% -0.2% 11:30pm Japan Tokyo Core CPI y/y 0.2% -0.3% 11:30pm Japan Unemployment Rate 3.0% 3.1%

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The Fantasy Continues

Rudi Fronk and Jim Anthony, co-founders of Seabridge Gold, assess President Donald Trump's speech to a joint session of Congress and find it wanting.

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Irving Resources, Tightest Shares in Canada

Bob Moriarty of 321 Gold discusses Irving Resources, a spinoff from Gold Canyon Resources that has assets in northern Japan.

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PALLADIUM TODAY: Holding up, but vulnerable

Short Term: Medium Term: Long Term: Resistances: R1 773 20 DMA R2 776.50 Dec high R3 797 Jan 2017 high R4 833 HRL R5 911.50 2014 high Support: S1 773 20 DMA S2 763 Recent support S3 711 Jan 27 low S4 687 UTL Stochastics:Bearish Legend: BB – Bollinger band DMA – daily moving average Fibo – Fibonacci retracement line H&S – head-and-shoulder formation (H)SL – (horizontal) support line MACD – moving average convergence divergence UTL – uptrend line HRL – horizontal resistance line Technical Comment Analysis Prices are rangebound below the January highs – dips attract buying, but there seems a lack of buying pressure to push prices abaove $800 per oz. This suggests there may be scale-up producer selling ahead of $800 per oz. The long-term chart (see inset) shows a band of supply running up to $833 per oz, which prices are working their way through now.  Since palladium is one of the thinner metals markets, prices may well continue to oscillate higher, but lack of upside progress in recent months could prompt to a sell-off. The stochastics are bearish for now so more more consolidation seems likely. But given the large price swings, another sell-off cannot be ruled out, especially as prices are trading either side of the 20 DMA. Macro factors ETF investors showed renewed interest in palladium in mid-February. Holdings stand at 1.543 million oz, up from 1.522 million oz, but they are still down from a high earlier in the year of 1.715 million oz. This seems strange given the bullish price action but it does mean there may be some catch-up potential. The funds trading on Nymex reduced both their long and short exposure last week but not by much: longs cut 137 contracts and shorts cut 113 contracts. Still, there is little sign of scale-up shorting despite the high price, while the longs have been both buying and selling in recent weeks. The gross long position at 20,313 contracts is, however, more or less in mid-range compared with where it has been over the past few years at 12,824-26,460 contracts. While the gross short position is low, there is potential for the gross long position to climb.   Conclusion For most of 2016, palladium’s bull market has followed a choppy path that has involved 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 the poor Chinese auto sales data for January may well dampen the outlook for demand from the auto industry. This evening, we will get an update of US February auto sales too. We are not overly bullish at these levels but we expect dips to be well supported. The market could get more bullish again if ETF investors start to get more involved again. 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 prices face headwinds

FastMarkets

Precious metals are split this morning, March 1, bullion prices are off slightly, with spot gold prices at $1,243.71 per oz, while the PGMs are up an average of around 0.5% – this after a generally weaker day on Tuesday when prices closed down an average of 0.8%.

The base metals prices on the London Metal Exchange are for the most part higher this morning, the exceptions are nickel and tin that are off marginally, while the rest are firmer, led by a 0.9% gain in zinc prices to $2,848 per tonne.

Lead prices are up 0.6% at $2,263 per tonne, while aluminium and copper prices are firmer by 0.1% and 0.3% respectively, with three-month copper prices at $6,000 per tonne. Volumes have been noticeably higher with 9,366 lots traded as of 06:45 GMT.

US president Donald Trump’s speech to Congress did not upset markets and manufacturing data out of China this morning has provided a firm base for the metals’ outlook. Today’s firmer tone also follows on from some follow through buying on Tuesday that saw the base metals complex climb an average of 0.5%, led by a 1.5% rise in tin and a 1.3% gain in aluminium.

In Shanghai this morning, the base metals on Shanghai Futures Exchange are up an average of 0.7%, with aluminium, copper and zinc prices leading on the upside with gains of 2%, 1.5% and 1.3% respectively, with copper prices at 48,540 yuan per tonne, lead and nickel are little changed, while tin prices are down 0.6%. Spot copper prices in Changjiang are up 1.3% at 48,160-48,360 yuan per tonne, the LME/Shanghai copper arb ratio has edged up to 8.08.

In other metals in China, May iron ore prices on the Dalian Commodity Exchange are off 1.3%, on the SHFE, steel rebar is down 1.2%, gold prices are off 0.9% and silver prices are off 0.6%. In international prices, spot Brent crude oil prices are slightly weaker at $56.38 per barrel, while the yield on US 10-year treasuries has edged up to 2.413%.

Equities saw the Euro Stoxx 50 climb 0.3% on Tuesday, but the Dow broke its twelve-day winning streak, it paused by edging lower by 0.1%. In Asia this morning, markets are for the most part slightly firmer with the Nikkei up 1.4%, the Kospi is up 0.3%, the Hang Seng is up 0.2%, the CSI 300 is up 0.1%, although the ASX 200 is off 0.1%. With Trump’s speech giving a lot of rhetoric but little detail the market has switched its focus to the US Federal Reserve and with the tone from the Fed getting more hawkish about a March rate rise, equities may start to face some headwinds. Lack of detail from Trump could add to that too.

In FX, the more hawkish US Fed has lifted the dollar index that was recently quoted at 101.71, and strength in the dollar is weighing on other currencies with the euro at 1.0540, the sterling at 1.2356, the yen at 113.60 and the Australian dollar at 0.7642. Emerging market currencies remain on a back footing too.

The economic agenda is extremely busy today, Japan’s final manufacturing PMI dipped to 53.3, as did China’s non-manufacturing PMI that came in at 54.2 from 54.6, but China’s manufacturing PMI climbed on both counts with the official data rising to 51.6 from 51.3 and the Caixin manufacturing index shot up to 51.7 from 51. Later today there is more PMI data out across Europe and the USA, plus German CPI and unemployment change, UK lending, US personal income, spending and PCE prices, construction spending, crude oil inventories, total vehicle sales and the Beige book – see table below for more details.

The base metals should take comfort from the better Chinese PMI manufacturing data and we expect that to be the main driver, but a more hawkish Fed and the stronger dollar that brings, may act as headwinds. That is, unless the markets’ view is that a more hawkish Fed signals the US recovery is gaining momentum, which would be a bullish factor, especially while interest rates are still relatively low. For now we remain bullish for the industrial metals, but with so much data out today and important data out over the rest of the week, there will be room for some increased trading activity/volatility. Also note that today is options declaration.

Gold prices are reacting to the bullishness in other markets and are easing accordingly as the bullishness raises the opportunity cost of holding gold. That said, with US president Trump’s speech not giving much substance there is still room for disappointment and as we move into March the focus on geopolitical issues in Europe will increase. As such, we would expect any dips in gold prices to be well supported. Silver and the PGMs may manage to hold up better than gold, given their industrial attributes.

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

Overnight Performance GMT 06:45 +/- +/- % Lots Cu 6000 20.5 0.3% 3169 Al 1922.5 1.5 0.1% 2968 Ni 10950 -10 -0.1% 1058 Zn 2848 25 0.9% 1886 Pb 2263 14 0.6% 275 Sn 19255 -45 -0.2% 10 Average 0.3%        9,366 Gold 1243.71 -2.19 -0.2%   Silver 18.273 -0.007 0.0% Platinum 1021.5 4.5 0.4% Palladium 772.2 5.2 0.7% Average PM   0.2%     SHFE Prices 06:45 GMT RMB Change % Change Cu 48540 710 1.5% AL 14100 275 2.0% Zn 23165 290 1.3% Pb 18570 30 0.2% Ni 90820 -100 -0.1% Sn 146060 -860 -0.6% Average change (base metals)     0.7% Rebar 3523 -41 -1.2% Iron ore 696 -9.5 -1.3% Au 279.4 -2.45 -0.9% Ag 4287 -27 -0.6%     Economic Agenda GMT Country Data Actual Expected Previous 12:01am UK BRC Shop Price Index y/y -1.0% -1.7% 12:30am Japan Final Manufacturing PMI          53.3          53.6          53.5 12:47am China Non-Manufacturing PMI          54.2          54.6 12:54am China Manufacturing PMI          51.6          51.2          51.3 1:45am China Caixin Manufacturing PMI          51.7          50.9          51.0  7:00am UK Nationwide HPI m/m 0.2% 0.2% All Day Germany Prelim CPI m/m 0.6% -0.6% 8:15am Spain Manufacturing PMI          55.9          55.6 8:45am Italy  Manufacturing PMI          53.6          53.0 8:50am France Final Manufacturing PMI 52.3 52.3 8:55am Germany German Unemployment Change -10K -26K 8:55am Germany German Final Manufacturing PMI 57 57 9:00am EU Final Manufacturing PMI          55.5          55.5 9:30am Uk Manufacturing PMI 55.7 55.9 9:30am UK Net Lending to Individuals m/m 4.0B 4.8B 9:30am UK M4 Money Supply m/m -0.1% -0.5% 9:30am UK Mortgage Approvals 69K 68K Tentative Germany German 10-y Bond Auction 0.33|2.2 1:30pm US Core PCE Price Index m/m 0.3% 0.1% 1:30pm US Personal Spending m/m 0.3% 0.5% 1:30pm US Personal Income m/m 0.3% 0.3% 2:45pm US Final Manufacturing PMI          54.4          54.3 3:00pm US ISM Manufacturing PMI          56.2          56.0 3:00pm US Construction Spending m/m 0.7% -0.2% 3:00pm US ISM Manufacturing Prices          68.5          69.0 3:30pm US Crude Oil Inventories 1.5M 0.6M All Day US Total Vehicle Sales 17.7M 17.6M 6:00pm US FOMC Member Kaplan Speaks 7:00pm US Beige Book 11:00pm US FOMC Member Brainard Speaks

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