Metals consolidate, but remain well placed to try higher

LONDON (Aug 15)  Metal prices started in Europe yesterday down around 0.3 percent, but improved as the day progressed with the base metals closing up around 0.7 percent and bullion up by 1.1 percent on average. Silver was once again a strong performer, it was up 1.9 percent, gold closed up 1.1 percent, lead was up 1.4 percent  and nickel and aluminium were up 0.7 percent. The fact there was limited follow through selling yesterday after the rallies paused on Tuesday is a bullish sign, but we now need to see whether there is the determination to drive prices higher.

This morning the metals are mixed the base metals are down an average of 0.4 percent on good volume of 9,168 lots. Copper is off 0.6 percent at $7,283.50 and nickel is down 0.7 percent at $14,750, while the precious metals are up around 0.5 percent on average, with gold up just 0.1 percent at $1,338.90, while the rest are up around 0.6 percent – see table attached for more details.

In Shanghai the base metals are mixed, copper is off 0.1 percent at Rmb 52,350, lead is up 1.3 percent at Rmb 14,520, zinc is up 0.4 percent at Rmb 14,915 and aluminium is up 0.3 percent at Rmb 14,420. Rebar is off 0.3 percent at Rmb 3,711 and gold is up 0.2 percent at Rmb 264.70.

Spot copper in Changjiang is up 0.1 percent at Rmb 52,600-52,900 which puts the backwardation with the futures at an equivalent of around $90/tonne, while the LME/Shanghai copper arbitrage ratio is weaker at 7.18, which means the arb window remains closed.