BULLION MORNING VIEW – Silver price leads the rebound for precious metals

Aug 22, 2014 - 7:06 AM GMT
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Precious metals were mixed yesterday with the gold price off one percent to $1,276.60, platinum was down 0.6 percent at $1,414, silver was off 0.2 percent at $19.42, but palladium’s stronger fundamentals shone through with a 1.5 percent rebound to $877.

Precious metals are firmer with average gains of 0.3 percent, the silver price leads the rebound with a 0.5 percent gain to $19.52, after a low yesterday of $19.31. Gold and platinum are up 0.2 percent at $1,279.60 and $1,416.40, whilst the palladium price is up 0.4 percent at $880.80.

Bullion prices in Shanghai are mixed with the gold price off 0.8 percent at Rmb 256.45, but interestingly silver is up 0.1 percent, which suggests some industrial buying may be taking advantage of these lower prices.

Equities – the Euro Stoxx 50 put in another strong performance yesterday with a 1.3 percent gain, the Dow closed up 0.4 percent and Asia is mixed with the Nikkei off 0.2 percent, the Hang Seng and CSI 300 are up 0.3 percent and the Kospi is up 0.4 percent. Good data from the US seems to be boosting sentiment around the globe.

Currencies – the dollar index’s rise has paused at 82.11, which is not surprising after the gains of late and ahead of the Jackson Hole speeches starting today. The euro is attempting to rebound, last at 1.3288, sterling remains weak at 1.6582, the aussie is firmer at 0.9322, while the yen is weak at 103.73, as is the yuan at 6.1608.

The economic agenda today is focused on Jackson Hole with Fed Chair Janet Yellen speaking at 3pm BST and European Central Bank president Mario Draghi speaking at 7:30pm BST.

Precious metals weakened yesterday with gold dropping through $1,280 to a low of $1,273, silver expended lower too as did platinum that dropped below the June lows to reach $1,413, while palladium ran into support relatively early. On balance, we expect good scale down buying into this weakness, which may be starting to be seen now in the likes of silver.

 

 
BST 06:06 +/- +/- % Lots
Cu 7062.5 35.25 0.5% 3065
Al 2067 8.5 0.4% 483
Ni 18896 20 0.1% 165
Zn 2368 11.5 0.5% 785
Pb 2255 9 0.4% 55
Sn 22111 -89 -0.4% 67
Steel 450 0 0.0% Total
Average (BM ex-Steel) 0.3% 4,620
Gold 1279.6 3 0.2%
Silver 19.52 0.1 0.5%
Platinum 1416.4 2.4 0.2%
Palladium 880.8 3.8 0.4%
Average PM   0.3%