Base metals prices on the London Metal Exchange were weaker on the morning of Monday June 28, while those on the Shanghai Futures Exchange were more mixed.
The spread of the Delta variant of Covid-19 across parts of Southeast Asia, Australia and South Africa is causing concern about a 4th wave.
Base metals
LME three-month base metals prices, with the exception of tin that was untraded, were down across the board on Monday by an average of 0.8%. These were led by a 1.6% fall in lead ($2,196 per tonne), while copper prices dipped by 0.6% to $9,377.50 per tonne.
The most-active Shanghai Futures Exchange base metals contracts were - for the most part - weaker, with August nickel the only contract registering gains. The rest were down by an average 1.1%, led by a 1.8% decline in August lead, while August copper was down by 0.7% at 68,440 yuan ($10,590) per tonne.
Precious metals
Spot precious metals were up across the board, with gold at 0.1% higher, at $1,783.66 per oz, while the more industrial-based precious metals were up by an average of 0.7%.
Wider markets
The yield on United States 10-year treasuries was 1.53% on Monday morning, up from 1.49% at a similar time last Friday.
Asia-Pacific equities were mainly weaker on Monday - the Nikkei (-0.14%), the ASX 200 (-0.03%), the Kospi (-0.14%) and the Hang Seng (-0.02%) were all down, while the CSI 300 gained 0.05%.
Currencies
The US Dollar Index continues to consolidate. It was at 91.85 on Monday morning, little changed from where it was at a similar time on last Friday (91.76).
Major currencies were mainly consolidating this morning: the Australian dollar (0.7591), the euro (1.1925) and the Japanese yen (110.66). But the Sterling (1.3893) was weaker.
Key data
Data already out on Monday showed that Germany’s import prices had risen by 1.7% in May, after a 1.4% rise in April.
Still to come on the economic agenda are scheduled talks from Germany’s Bundesbank president Jens Weidmann, United Kingdom’s Andy Haldane and US Federal Open Market committee member John Williams.
Monday’s key themes and views
Copper prices continued to consolidate on Monday morning following similar movements on Thursday and Friday, which in turn followed a three-day rebound at the start of last week. The rest of the base metals are also consolidating but are doing so after a stronger performance last week. Overall, while prices are generally holding up well relative to the strong gains seen over the past 15 months, there does seem to be a lack of willingness among buyers to chase prices above these levels.
Gold prices have been consolidating after the sharp sell-off in mid-June. Given the pattern on the chart, gold prices still look vulnerable. The cheaper gold becomes, the more attractive it is as a haven asset, and if the Delta variant of the coronavirus does drive a fourth wave of the pandemic, then investor confidence may well take another hit.