The precious metals prices are showing gains across the board this morning: Gold (+0.4%) at $1,315.08 per oz, silver (+0.6%), platinum (+0.4%) and palladium (+0.3%).
The precious metals are also consolidating in recent low ground, which suggests investors are also waiting on the sidelines, as they are with the base metals – we expect dips to remain well supported. Any hawkish tone from the FOMC meeting could well lead to more of a sell-off, even if it turns out to be a knee-jerk reaction.
Base metals prices on the London Metal Exchange are for the most part weaker this morning, Wednesday March 21, with all of the metals, except lead and tin, showing average losses of 0.3%. Copper is down by 0.4% at $6,732 per tonne, while lead is up by 0.4% at $2,360 per tonne and tin is little changed.
Volume has been average with 7,278 lots traded as of 07.38 am London time.
On the Shanghai Futures Exchange this morning, lead prices are unchanged, while the rest are down by between 0.4% for aluminium and 1.7% for zinc, with copper prices off by 1.5% at 50,580 yuan ($7,987) per tonne. Spot copper prices in Changjiang are down by 0.8% at 50,460-50,580 yuan per tonne and the LME/Shanghai copper arbitrage ratio is at 7.51.
In other metals in China, iron ore prices are down by 0.9% at 463 yuan per tonne on the Dalian Commodity Exchange. On the SHFE, steel rebar prices are down by 0.5%, while gold and silver prices are little changed.
In wider markets, spot Brent crude oil prices are off by 0.09% at $67.54 per barrel and the yield on US 10-year treasuries is at 2.88%, while the German 10-year bund yield is at 0.58%.
Equity markets in Asia are mixed this morning: CSI 300 (-0.41%), ASX 200 (+0.23%), while the Kospi and Hang Seng are little changed and the Nikkei is closed. This follows strength in western markets on Tuesday, where in the United States the Dow Jones closed up by 0.47% at 24,727.27, and in Europe where the Euro Stoxx 50 closed up by 0.51% at 3,412.08.
The dollar index at 90.18 is moving sideways-to-higher, with traders waiting to see what the US Federal Open Market Committee (FOMC) statement says. The other major currencies are for the most part consolidating: Euro (1.2276), sterling (1.4028), yen (106.34) and the Australian dollar (0.7700). The yuan is likewise consolidating at 6.3300, while the emerging market currencies we follow are mixed with the ringgit and peso consolidating, while the rand, real, rupee and rupiah are on a back footing.
Economic data out today includes UK employment data, earnings and industrial order expectations, with US data including the current account, existing home sales, crude oil inventories, followed by the FOMC rate decision, statement, economic projections and press conference. The outcome of the FOMC meeting may well provide the markets with fresh direction.
Copper, aluminium and tin prices are leading on the downside, while lead, zinc and nickel prices are weak but are holding up better than the others. Despite the price weakness it does not feel that sentiment in the base metals camp is particularly weak, although it is no doubt concerned about a potential trade war, but neither is it bullish and in this environment buyers seem in no hurry to buy/chase prices higher, while stale long liquidation seems to be weighing on prices.
Metal Bulletin publishes live futures reports throughout the day, covering major metals exchanges news and prices.