Gold prices turned back by resistance again

Precious metals were largely lower yesterday, with gold, silver and platinum off an average of 1.1 percent, while palladium bucked the trend with a one percent rise to $697. Gold prices closed at $1,327.10. Base metals were quite mixed yesterday with copper off one percent at $4,797 and aluminium closed down 0.8 percent at $1,647, while the rest were up between 2.2 percent for nickel at $10,695 and tin that was up 0.1 percent at $19,750. Lead and zinc were up around 0.7 percent.

This morning the base metals remain mixed with aluminium and zinc are up 0.4 percent, nickel is off 0.5 percent at $10,645, lead is up 0.2 percent, while copper and tin are unchanged. Volume remains light at 4,698 lots, with zinc trading 1,638 lots, nickel 1,224 lots and copper 877 lots.

Palladium is up 0.5 percent at $700.2, gold and platinum are off 0.1 percent with gold prices at $1,325.60, while silver is of 0.4 percent at $19.09.

In Shanghai, the metals are mixed with copper and aluminium off 0.4 and 0.2 percent respectively, with copper at Rmb 37,480, zinc is up 0.9 percent and nickel is up 0.6 percent, tin is up 0.2 percent and led is unchanged. Spot copper in Changjiang is down 0.4 percent, the spread is at an equivalent to around $32 per tonne, while the LME/Shanghai arb ratio is at 7.81, meaning the arb window is closed.

In other metals in China, iron ore is up 0.9 percent, steel rebar is off 0.2 percent, silver is down 1.8 percent and gold prices are off one percent.

Equities yesterday saw Europe remain under pressure, the Euro Stoxx 50 dropped 0.2 percent, but the Dow closed up 0.7 percent helped by a pick-up on consumer confidence. Asia, however, is negative this morning with the Nikkei off 1.4 percent, the Hang Seng is off 0.6 percent, the CSI 300 is down 0.1 percent, the Kospi is off 0.5 percent and the ASX 200 is little changed.

In FX, the dollar is edging higher, last at 95.57, the euro is weaker at 1.1206, sterling is last at 1.3010, the yen is firm at 100.57 and the aussie is firmer at 0.7675. The yuan is flat at 6.6687 with most emerging market currencies fairly flat, the exception being the rand that is firmer at 13.4436.

German GfK consumer climate eased to 10 from 10.2, later we get US data on durable goods orders and crude oil inventories. There are, however, numerous central bank speakers today, including UK’s MPC Nemat Shafik, Fed Chair Janet Yellen, FOMC Member James Bullard and ECB President Draghi. There is also an informal OPEC meeting in Algeria, where the mood has turned less bullish about a freeze in output.

Copper prices have had a good rebound since September 12, but light selling has dominated since yesterday’s opening, but this looks like consolidation, while the rest are holding up and look well placed to trend higher – a firmer dollar may act as a headwind.

Gold prices are pulling back from resistance once again, indeed this is the fourth time they have done so since peaking in July. As such, prices are consolidating within a wedge shape. The danger is if stale long liquidation unfolds. Silver has followed gold’s lead, as has platinum, while palladium is holding up well and is doing so above its resistance line – whether it can do it alone remains to be seen.

 

Overnight Performance
BST	06:59	+/-	+/- %	Lots
Cu	4796	-1	0.0%	877
Al	1653.5	6.5	0.4%	617
Ni	10645	-50	-0.5%	1224
Zn	2315	9	0.4%	1638
Pb	1962.5	4.5	0.2%	342
Sn	19750	0	0.0%
	Average		0.1%	4,698
Gold	1325.61	-1.49	-0.1%
Silver	19.087	-0.083	-0.4%
Platinum	1023.8	-1.2	-0.1%
Palladium	700.2	3.2	0.5%
	Average PM		-0.1%

 

SHFE Prices 06:59 BST	RMB	Change	% Change
Cu	37480	-160	-0.4%
AL	12450	-30	-0.2%
Zn	18005	165	0.9%
Pb	14685	5	0.0%
Ni	81890	500	0.6%
Sn	126840	230	0.2%
Average change (base metals)	0		0.2%
Rebar	2278	-4	-0.2%
Au	285.65	-2.85	-1.0%
Ag	4262	-77	-1.8%

 

Economic Agenda
BST	Country	Data	Actual	Expected	Previous
7:00am	Germany	GfK German Consumer Climate	10	10.2	10.2
9:05am	UK	MPC Member Shafik Speaks
1:30pm	US	Core Durable Goods Orders m/m		-0.5%	1.3%
1:30pm	US	Durable Goods Orders m/m		-1.0%	4.4%
3:00pm	US	Fed Chair Yellen Testifies
3:10pm	US	FOMC Member Bullard Speaks
3:30pm	EU	ECB President Draghi Speaks
3:30pm	US	Crude Oil Inventories		2.4M	-6.2M

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