London 13/02/2013 -The metals tried lower on Tuesday but ran into underlying support. At the day’s lows average losses across the base and precious metals were 0.7 percent; the base metals went on to close with an average gain of 0.7 percent, while a strong performance in the PGMs led to a 1.1 percent average gain on the precious metals, with the PGMs skewing the average with gains of around 1.7 percent. A rebound in the euro and yen, also helped weaken the dollar. The PGMs had another spurt higher on the back of news that Zimbabwe’s government had repossessed some land owned by Zimplats.
This morning the base metals are firmer with average gains of 0.3 percent, with copper up 0.1 percent at $8,246.75; lead and nickel are up the most with gains of 0.4 percent. The precious metals are down by an average of 0.2 percent with gold at $1,649.30 and platinum at $1,714. Volumes on the LME metals remain light at 1,214 lots traded as of 07:15 GMT.
Equities – yesterday saw positive markets with the EuroStoxx 50 closing up 1 percent and the Dow closing up 0.3 percent, but Asia has been mixed with the Nikkei off 1 percent, in reaction to the stronger yen, the MSCI Asia Apex is up 0.5 percent, India’s Sensex 30 is up 0.7 percent and the All Ordinaries is up 0.9 percent.
Currencies - the dollar has pulled back with the index at 80.04 after peaking yesterday at 80.51, the euro is at 1.3446, after a recent low of 1.3350, the yen is at 93.11, sterling is at 1.5650, while the aussie is rebounding, last at 1.0355 after a low of 1.0222.
The economic agenda is busy with EU industrial production, UK inflation, the Bank of England Governor King is speaking at 10:30 GMT and in the US we get data of retail sales, import prices, business and crude oil inventories and FOMC members Bullard speaks as does Jack Lew, the US Treasury Secretary nominee. Also later we get Japan’s GDP data, with more GDP data out across Europe tomorrow.
Our view remains the same we feel with prices of the base metals near recent and multi-month highs that there is likely to be producer selling up in this area and that might well weigh on prices, especially if investment money has already lifted prices over the past few months. In addition, given a pick-up in political uncertainty in Europe and the upcoming potential spending cuts in the US, we would not be surprised to see some profit-taking unfold.
For the PGMs we remain bullish on the back of supply concerns, but also feel that prices have already climbed considerably so would not be surprised to see them pull back to consolidate, but we would expect good underlying buying. We also expect gold to remain well supported as we feel the competitive currency devaluation will remain an issue for some time.
In the newsYanis Varoufakis has been named FinMin of the new Greek Government. He was interviewed several times on FXStreet back in 2011 and 2012. More information.
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