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
Gold and the rest of the precious metals prices are little
changed this morning 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.
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
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.