On Monday morning the base metals have added to Friday's gains, with precious metals also higher backed by the weak sentiment for the greenback.
The base metals were higher on Friday on the back of a weaker dollar and as weakness earlier in the week had generally run into scale down buying. At the close on Friday the base metals were up an average of 2.1 percent led by a 4.2 percent rise in nickel to $13,255, a 2.2 percent rise in aluminium to $1,821.50 and a two percent rise in lead to $2,073.50.
Precious metals however were hardly impacted by the weaker dollar with prices closing down an average of 0.8 percent, with platinum off 1.3 percent and gold off 1.1 percent at $1,179.90.
This morning the base metals have added to Friday’s gains and are up a further 0.6 percent on average, led by a 1.1 percent rise in nickel, tin is up 0.7 percent at $15,860, while the rest are up between 0.4 and 0.6 percent with copper at $6,061. So far this morning volume has been average with 4,338 lots traded.
Precious metals are 0.6 percent higher, led by a 1.1 percent rise in silver to $15.88, while the gold price lags behind with a 0.3 percent rise to $1,183.50.
In Shanghai, the June contracts are up 2.3 percent led by a five percent rise in nickel to 101,490, a 2.7 percent rise in tin, a 2.3 percent rise in lead, a 1.6 percent rise in zinc, 1.3 percent in copper to Rmb 43,840 and a 0.9 percent rise in aluminium.
Spot copper in Changjiang climbed 1.1 percent to Rmb 44,000-44,200, the spread with the futures in around an equivalent of some $58 per tonne backwardation and the LME/Shanghai copper arb ratio is at 1 to 7.23.
As The Bullion Desk's analyst reports, the base metals are looking stronger as they have attracted follow through strength from Friday’s performance. Lead and zinc rallies continue to push through potential resistance levels, the rebounds in nickel and tin are gaining momentum and recent weakness in copper and aluminium has been turned round with aluminium now challenging resistance. All in all, this looks constructive for the near term outlook.
The weaker greenback is expected to lend support to the precious metals, though currently they are on a back foot, especially silver and
platinum. Investors’ appetite remains
low, with short selling still being seen in silver, although
short-covering was evident in gold last week.
