By William Adams / February 16, 2018 / www.metalbulletin.com /
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Metals prices on the London Metal Exchange are up across the board this morning, Friday February 16, by an average of 0.4%, while trading activity has been light due to the Lunar New Year holiday.
Lead prices are up by the most in percentage terms, with a 0.7% rise, followed by aluminium (0.6%) copper (0.4%) at $7,217 per tonne, with nickel and tin prices up 0.35 and zinc little changed.
With the Lunar New Year break under way, volume has been light with 2,122 lots traded as of 06.02 am London time.
This follows a fourth day of general strength, with prices closing up by an average of 0.3% on Thursday, which saw nickel prices rally 1.2%, although aluminium prices did drop 1.5% to $2,154 per tonne after another stock rise. Inflow of aluminium into LME-registered sheds has been 265,475 tonnes over the past five working days.
Precious metals prices are up an average of 0.5% this morning, with spot gold prices up 0.3% at $1,357.81 per oz, silver prices up 0.1% at $16.88 per oz, while the platinum group metals are up 0.8% with platinum up at $1,007.10 per oz and palladium at $1,024.70 per oz. This follows a mixed, but little changed performance on bullion on Thursday, while platinum prices climbed 0.3% and palladium prices climbed 1.6%.
Exchanges remain closed in China for the Lunar New Year holiday and will not reopen until Thursday February 22.
In wider markets, spot Brent crude oil prices are up by 0.24% at $64.61 per barrel and the yield on US 10-year treasuries remains strong at 2.91%, as is the German 10-year bund yield at 0.76%.
Only a few equity markets are open in Asia - the Nikkei is up by 1.19% and the ASX 200 is down by 0.08%. This follows continued rebounds in western markets on Thursday, where in the United States the Dow Jones closed up by 1.23% at 25,200.37 (the record high being 26,616.71), and in Europe where the Euro Stoxx 50 closed up by 0.59% at 3,389.63.
The dollar index continues to weaken and was recently quoted at 88.30, which has breached the previous low of 88.43 on January 25. The euro (1.2543) and yen (105.71) have broken into fresh high ground, sterling (1.4141) continues to rebound and does the Australian dollar (0.7978). The emerging currencies we follow are stronger, suggesting little concern about stronger US yields.
Economic data out today includes: German WPI, UK retail sales and US data on housing starts, building permits, import prices and preliminary University of Michigan consumer sentiment and inflation expectations.
Zinc and nickel are the two metals pushing the envelope on the upside, with copper, tin and lead prices pushing up to challenge high ground. Aluminium prices are off recent lows, but are not surprisingly struggling on the upside given the stock rises in recent days. We remain bullish on the back of concerted global growth combined with a constrained producer supply response following the capital expenditure cuts seen between 2012 and 2015. Trading during the Lunar New Year holidays is likely to be nervous, especially as US bond yields are on the rise, but for now emerging markets are not showing concern, no doubt as stronger growth will help countries repay debt. We expect dips to remain well supported.
Gold prices are firm and are well placed to challenge resistance levels that lie at $1,366 per oz, $1,375.25 per oz and $1,388.70 per oz - clearance of these levels would suggest prices are breaking out of a multi-year base. Platinum's chart is also looking potentially bullish, silver has more work to do, while palladium prices are adjusting to the recent sell-off which has followed a long drawn out bull market.
| Overnight Performance |
| GMT | 06:02 | +/- | +/- % | Lots |
| Cu | 7,217 | 28.0 | 0.4% | 1,035 |
| Al | 2,168 | 13.5 | 0.6% | 467 |
| Ni | 14,195 | 45.0 | 0.3% | 141 |
| Zn | 3,584 | 1.5 | 0.0% | 234 |
| Pb | 2,632 | 19.5 | 0.7% | 242 |
| Sn | 21,650 | 70.0 | 0.3% | 3 |
| | Average BM | | 0.4% | 2,122 |
| Gold | 1,357.81 | 3.86 | 0.3% | |
| Silver | 16.88 | 0.02 | 0.1% | |
| Platinum | 1,007.10 | 8.10 | 0.8% | |
| Palladium | 1,024.70 | 7.70 | 0.8% | |
| | Average PM | | 0.5% | |
| Economic calendar |
| GMT | Country | Data | Actual | Expected | Previous |
| 7:00am | EUR | German WPI m/m | | 0.2% | -0.3% |
| 9:30am | GBP | Retail Sales m/m | | 0.5% | -1.5% |
| 1:30pm | USD | Building Permits | | 1.29M | 1.30M |
| 1:30pm | USD | Housing Starts | | 1.23M | 1.19M |
| 1:30pm | USD | Import Prices m/m | | 0.6% | 0.1% |
| 3:00pm | USD | Prelim UoM Consumer Sentiment | | 95.4 | 95.7 |
| 3:00pm | USD | Prelim UoM Inflation Expectations | | | 2.7% |