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Metals prices start the week firmer, gold prices remain upbeat

Gold prices remain upbeat with fresh highs set this morning at $1,219.55 per oz, silver and platinum prices are generally following gold’s lead, while palladium prices leapt higher on January 20 to fresh highs for 2016-2017 at $793.50 per oz and have extended those this morning to $796.50 per oz. Given potential for disappointment, or shocks, from the US administration we expect gold to remain in favour.

The base metals are bullish this morning, Monday January 23, with three-month prices on the London Metal Exchange up an average of 1.2% as of 06:48 GMT.

The charge is led by a 2.1% rebound in nickel prices to $9,895 per tonne, lead and zinc prices are up 1.2% and 1.7%, respectively, copper prices are up 1% at $5,817 per tonne, while aluminium and tin prices are up around 0.5%. Nickel has also seen the most volume with 3,463 lots traded, compared to 2,190 lots traded in copper – total volume as of 06:48 GMT was 10,560 lots.

The rebound in the base metals comes after a varied performance on Friday that saw aluminium prices climb 1.5%, lead prices climb 1.2%, while tin and nickel prices dropped 2.4% and 2.2%, respectively, zinc was little changed and copper prices ended the week at $5,757.50 per tonne.

In precious metals this morning, prices are up an average of 0.6%, with spot gold prices at $1,216.40 per oz. This was after a 1.9% rally on Friday, which was led by a 4.8% rise in palladium prices and 2.1% rise in platinum prices.

In Shanghai, the base metals on the Shanghai Futures Exchange are up an average of 1.4% this morning, and are led by a 3.2% rise in lead prices, with zinc and aluminium prices up either side of 2.3%, copper prices are up 1.3% at 47,040 yuan per tonne, while nickel and tin are off either side of 0.5%. Spot copper prices in Changjiang are up 1% at 46,800-47,000 yuan per tonne, the spread is either side of level and the LME/Shanghai copper arb ratio is at 8.10.

In other metals in China, May iron ore prices are down 3%, on SHFE steel rebar prices are down 2.2%, gold prices are up 0.9% and silver prices are up 0.6%. In international markets, spot Brent crude oil prices are slightly weaker at $55.40 per barrel.

Equities closed firmer on Friday with the Euro Stoxx 50 and Dow closing up 0.3% and 0.5%, respectively. This morning, the Nikkei is off 1.3%, but a stronger yen is weighing on that, the Hang Seng and Kospi are little changed, the CSI 300 is up 0.3% and the ASX 200 is down 0.8%. Markets still seem to be in wait-and-see mode regarding US president Donald Trump’s first moves.

In FX, the dollar index is weakening, it was recently quoted at 100.28, extending its recent weakness – this seems to be on continued disappointment that the new US president has yet to share his plans. As a result, currencies are stronger with the euro at 1.0747, sterling at 1.2459, the yen at 113.34, the Australian dollar is at 0.7570, the yuan is firmer at 6.8567, as are most of the emerging market currencies we follow – even the Mexican peso is stronger at 21.420, compared with a low of 22.037.

The economic agenda is fairly light, Japan’s all industries activity climbed 0.3%, Germany’s Bundesbank monthly report is out later, there is data on Chinese leading indicators, EU consumer confidence and European Central Bank president Mario Draghi is speaking – see table below for more details.

Most of the base metals pulled back to consolidate last week, some more than others with tin and nickel falling the most, while aluminium bucked the trend with prices setting fresh highs. This morning, however, prices are rebounding or pushing higher in the case of aluminium, lead and zinc. The underlying tone seems to remain bullish, but we would expect markets to be choppy this week as they react to policy announcements from the new US administration and ahead of the Chinese Lunar New Year that starts on Friday January 27, but with businesses activity likely to slow ahead of that.

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

Overnight Performance
GMT 06:48 +/- +/- % Lots
Cu 5817 59.5 1.0% 2190
Al 1854 9 0.5% 2046
Ni 9895 205 2.1% 3463
Zn 2800 47.5 1.7% 2455
Pb 2330 27.5 1.2% 401
Sn 20325 115 0.6% 5
  Average   1.2%       10,560
Gold 1216.4 6.5 0.5%  
Silver 17.139 0.079 0.5%  
Platinum 981.3 7.3 0.7%  
Palladium 791.7 4.7 0.6%  
  Average PM   0.6%  


SHFE Prices 06:49 GMT RMB Change % Change
Cu 47040 620 1.3%
AL 13675 295 2.2%
Zn 22895 540 2.4%
Pb 18850 590 3.2%
Ni 83050 -340 -0.4%
Sn 145510 -820 -0.6%
Average change (base metals) 0   1.4%
Rebar 3181 -70 -2.2%
Iron ore 608 -19 -3.0%
Au 273.35 2.4 0.9%
Ag 4128 24 0.6%


Economic Agenda
GMT Country Data Actual Expected Previous
4:30am Japan All Industries Activity m/m 0.3% 0.4% 0.0%
11:00am Germany German Buba Monthly Report      
2:00pm China CB Leading Index m/m     1.0%
3:00pm EU Consumer Confidence   -5 -5
11:30pm EU ECB President Draghi Speaks