Silver and platinum prices well placed

Jan 31, 2017 - 12:19 PM GMT

Precious metals are up an average of 0.7% this morning January 31, with palladium prices rebounding 1.7%, platinum prices up 0.6% and gold and silver prices both up around 0.3%. This follows a generally firmer day yesterday, when prices closed up an average of 0.3%. Concerns over President Trump’s unpredictability, with the sudden firing of acting Attorney General Sally Yates, seem to be underpinning bullion prices.

Base metals are little changed this morning, January 31: aluminium prices are off 0.3%, tin prices are up 0.3%, nickel prices are up 0.2%, while the rest are up a few dollars per tonne. Three-month copper prices are at $5,853 per tonne – although volume remains light, with 1,200 lots traded as of 06:44 GMT.

Yesterday’s trading on the LME saw fairly independent moves, some of which were large, with lead prices rebounding 3.3%, nickel prices up 1.9%, tin prices dropping 1.4%, copper and aluminium prices off 0.8% and zinc prices up 0.7%.

Equities were weaker yesterday, with the Euro Stoxx 50 closing down 1.2% and the Dow off 0.6%. In Asia, the Nikkei is off 1.7%, the Kospi is down 0.8% and the ASX 200 is down 0.7%.

In FX, the dollar index is treading water around 100.40, but the trend is to the downside. The euro is slightly weaker at 1.0690, as are sterling at 1.2495 and the aussie at 0.7558. Meanwhile, the yen is attracting some safe-haven interest, firming to 113.62. In emerging market currencies, most are flat, but the real and peso are strengthening, while the rand is weaker.

The economic agenda is busy today, with Japan’s monetary policy decisions, statement and housing starts; French GDP and consumer spending; and German retail sales. There are CPI numbers due out across much of Europe; unemployment data out in Germany, Italy and the EU; UK lending data; and EU GDP.

US data includes employment costs, house prices, Chicago PMI and consumer confidence – see table below for more details.

Generally the dips in base metals prices seem to be attracting buying, the exceptions being aluminium that probably overshot on the upside in recent weeks, and tin that is still trying to find support having broken out of its extended sideways range. The consolidations in copper, lead and zinc prices mean those metals are still well placed to push ahead. The backwardation in lead may provide lead prices with further fuel, but all eyes will be on whether the backwardation attracts metal into LME warehouses or not – if anything, in recent days LME lead stocks have started to fall at a faster pace.

The precious metals have had an orderly pullback as profit-taking/liquidation emerged after the US inauguration, but the dips were well supported and the likes of silver and platinum are now well placed to extend gains. Gold prices pulled back slightly further, as did palladium prices, but the overall trends remain to the upside and gold may well pick up more safe-haven buying if President Trump starts to make more aggressive decisions.


Overnight Performance
GMT 06:44 +/- +/- % Lots
Cu 5853 2.5 0.0% 459
Al 1804.5 -5.5 -0.3% 406
Ni 9745 15 0.2% 164
Zn 2784 2 0.1% 89
Pb 2352.5 3 0.1% 64
Sn 19700 55 0.3% 18
Average 0.1%         1,200
Gold 1200.46 3.56 0.3%  
Silver 17.181 0.041 0.2%
Platinum 991.5 5.5 0.6%
Palladium 749.5 12.5 1.7%
Average PM 0.7%


Economic Agenda
GMT Country Data Actual Expected Previous
2:56am Japan BOJ Outlook Report
2:56am Japan BOJ Policy Rate -0.1% -0.1% -0.1%
2:56am Japan Monetary Policy Statement
5:00am Japan Housing Starts y/y 3.9% 8.5% 6.7%
6:30am France French Prelim GDP q/q 0.4% 0.4% 0.2%
6:30am Japan BOJ Press Conference
 7:00am Germany German Retail Sales m/m 0.6% -1.8%
7:45am France French Consumer Spending m/m 0.2% 0.4%
7:45am France French Prelim CPI m/m -0.5% 0.3%
8:00am EU ECB President Draghi Speaks
8:00am Spain Spanish Flash CPI y/y 2.4% 1.6%
8:55am Germamy German Unemployment Change -5K -17K
9:00am Italy Italian Monthly Unemployment Rate 11.8% 11.9%
9:30am UK Net Lending to Individuals m/m 5.3B 5.1B
9:30am UK M4 Money Supply m/m 0.3% 0.4%
9:30am UK Mortgage Approvals 69K 68K
10:00am EU CPI Flash Estimate y/y 1.5% 1.1%
10:00am EU Core CPI Flash Estimate y/y 0.9% 0.9%
10:00am EU Prelim Flash GDP q/q 0.4% 0.3%
10:00am EU Unemployment Rate 9.8% 9.8%
1:30pm US Employment Cost Index q/q 0.6% 0.6%
2:00pm US S&P/CS Composite-20 HPI y/y 5.0% 5.1%
2:45pm US Chicago PMI 55.1 54.6
3:00pm US CB Consumer Confidence 112.6 113.7