Gold prices extend2017 gains, rally looking robust

Feb 24, 2017 - 9:12 AM GMT
by

FastMarkets

While the base metals struggled on Thursday February 23, precious metals prices had gains of between 0.4% for palladium prices and 1% for gold and silver prices, while platinum prices were up 0.8%. There have been follow through gains in the precious metals this morning too, with prices up an average of 0.5%, led by a 0.8% gain in palladium, while gold prices are up 0.3% at $1,252.87 per oz.

The base metals are firmer this morning, Friday February 24, with metals prices on the London Metal Exchange up an average of 1.1%, led by a 1.5% gain in nickel prices, while copper is up 0.5% at $5,898 per tonne and aluminium is up the least with a 0.2% rise.

Volume has been higher than recently, with 8,233 lots traded as of 07:02 GMT. This price rebound follows a very weak day on Thursday that saw prices down an average of 2.1%, led by a 2.9% fall in copper prices that closed at $5,853 per tonne.

In Shanghai, the base metals on the Shanghai Futures Exchange are down 1.3% on average with copper prices off 1.9% at 47,660 yuan per tonne, while tin is off the least with a 0.8% fall. Spot copper in Changjiang is down 2.6% at 47,120-47,320 yuan per tonne – this reflects the weakness the market saw on the opening after the sell-off on the LME on Thursday, the weaker prices therefore do seem to have attracted some bargain hunting as the Asian morning has progressed. The LME/Shanghai copper arb ratio has weakened to 8.08.

In other metals in China, May iron ore prices on the Dalian Commodity Exchange are down 2.4%, on SHFE steel rebar prices are off 1.7%, while gold prices are up 1.4% and silver prices are up 1.1%. In international markets spot Brent crude oil prices are off 0.1% at $56.38 per barrel and US 10-year treasuries are 2.3795%.

In equities on Thursday, the Euro Stoxx 50 was off 0.2% and the Dow closed up 0.2%. Asia this morning is generally weaker with the Kospi off 0.6%, the Nikkei and Hang Seng are off 0.5%, the ASX 200 is down 0.8% and the CSI 300 is little changed.

In FX, the dollar index pulled back on Thursday and was recently quoted at 100.93, down from a high on Thursday of 101.72. The euro is firmer at 1.0590, as are the Australian dollar at 0.7716, the yen at 112.79 and the sterling at 1.2553. The yuan is flat at 6.8710, but most of the emerging market currencies we follow are showing strength, especially the rupee, peso and rand – all of which suggests a fairly confident broader market.

The economic calendar is relatively light today with UK mortgage approvals, US new home sales and revised University of Michigan consumer sentiment and inflation expectations – see table below for more details.

A wave of weakness flushed through the base metals on Thursday, which has put all prices on more of a back footing but the fact rebounds are being seen this morning, suggests bargain hunting and a weaker dollar will be helping with that. The sell-offs suggests a degree liquidation as prices had struggled to make headway after recent strength. Given the pullback and initial rebound this morning, we will now need to see what follow through trading there is this morning as Europe and then the US open up.

Earlier on this week, the precious metals had an opportunity to sell-off but dips were bought into and gold and silver prices have since pushed higher to extend this year’s rally – this shows the overall rally remains robust and underlying sentiment remains bullish. The PGMs have yet to push above recent highs. We remain bullish for bullion and platinum, less so for palladium.

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

 

Overnight Performance
GMT 07:02 +/- +/- % Lots
Cu 5898 45 0.8% 3646
Al 1870 4.5 0.2% 1565
Ni 10710 155 1.5% 919
Zn 2819.5 38 1.4% 1754
Pb 2259 25.5 1.1% 334
Sn 19140 265 1.4% 15
Average 1.1%        8,233
Gold 1252.87 3.62 0.3%  
Silver 18.22 0.04 0.2%
Platinum 1013 6 0.6%
Palladium 776.4 6.4 0.8%
Average PM 0.5%

 

 

SHFE Prices 07:02 GMT RMB Change % Change
Cu 47660 -910 -1.9%
AL 13780 -165 -1.2%
Zn 22820 -385 -1.7%
Pb 18710 -220 -1.2%
Ni 88490 -890 -1.0%
Sn 145550 -1230 -0.8%
Average change (base metals)     -1.3%
Rebar 3454 -58 -1.7%
Iron ore 698.5 -17.5 -2.4%
Au 281.35 3.95 1.4%
Ag 4277 48 1.1%
Economic Agenda
GMT Country Data Actual Expected Previous
9:30am GBP BBA Mortgage Approvals 41.9K 43.2K
3:00pm USD New Home Sales 575K 536K
3:00pm USD Revised UoM Consumer Sentiment 96.1 95.7
3:00pm USD Revised UoM Inflation Expectations 2.8%