Prof nailed it. Risk on markets rallied as the chance of Brexit x100 i.e. a Le Pen victory now appears to be a long shot. Taking advantage of the relief rally in risk on assets like stocks, gold and silver were hit which will help the manipulators get lower prices for Comex options expiry tomorrow where they desperately need to shake out some long holders especially in the May silver contracts. Yet the dollar Index due to a Macron Euro relief rally is back under 99.00 and at 6 month lows. If this persists that will be PM bullish.
I think Centamin rose, albeit with great volatility in the first 10 minutes (6p range) for several reasons. Firstly the "more the merrier" competition for Egyptian gold tenders noted on here by Uncertain may have got some analysts salivating when they read that 14 co's have participated. The hope being that Egypt is going to join the international mining fraternity and be more open and progressive. Which will of itself help Centamin. But perhaps Cowichan and Siko's skepticism will be validated mid May.
Secondly regarding a comparison of Centamin today vs Randgold and Acacia. The market didn't seem impressed with Randgold's update this morning and Acacia's share price is now down 32% from last year's 613p high and looks like it could break down through 400p if the Tanzanian govt don't ease export restrictions soon and they have to shut down mines. In contrast CEY is making good progress with the Cleopatra decline at Sukari and developments in W.Africa. Perhaps evidence this morning of some switching investment to Centamin from its peers?
If Egyptian consortiums are bidding for licences, it's possible that they have fore-knowledge of the Governments intention to change it's mind and bring terms and conditions into line with Global best-practice subsequent to the granting of said licences.. - Under those circumstances, the important first move in acquiring the licences is the smart move. - Too many personal agendas in play I'm afraid. - Also, I wouldn't be surprised if some of these strategic-plays have links tracing back to the Judiciary.
Randgold taking a bath this morning down nearly 5%. Can only assume this is linked to the decision, announced this morning, to look to continue operations in Cote D'Ivoire mine rather than due to the fall in POG. ACA took a bad tumble first thing but are now recovering a bit to be down just a bit more than CEY who are down just short of 1%. My hope/expectation is that the fall in POG is an over-reaction to the French first round results. Le Pen is never going to win the second round second which means the markets are jumping for joy at the thought of a man still in his 30s who has never been an MP becoming President. It shows how bad things are that for the first time in over 60 years neither candidate in the run off is from an established party. The relief is purely down to it not being the nightmare scenario of a Le Pen/ Mellanchon second round. A lot of sensible French were doing a lot of soul searching as to who they would have voted for in that scenario: far right or far left. I suspect POG will recover throughout the day and then be back in the 1280s by the end of the week.
The economic agenda is busy today, Japan’s flash manufacturing PMI climbed to 52.8 from 52.4. Later there is PMI data out across Europe and the US, plus data on the EU current account, UK retail sales and US existing home sales. Speakers include UK Monetary Policy Committee member Michael Saunders and US Federal Open Market Committee member Neel Kashkari, it is also day one of an International Monetary Fund meeting. Although there is no flash Chinese PMI data out, the update on manufacturing in Europe and the US should provide further insight into how the global economy is doing.
Dip-buying appears to have emerged into the recent weakness in base metals prices, this fits in with our overall view to remain mildly bullish for the complex. What will be interesting now is to see if there is follow through buying and whether that starts to unnerve the shorts that have added to positions in recent weeks. Political uncertainty in the short term may keep potential buyers on hold.
Gold prices are consolidating recent gains as higher prices are unsurprisingly prompting some profit-taking, as at the end of the day Marine Le Pen is unlikely to be the next French president, but given the surprise over Brexit and the US election, there will be a lot of uncertainty and nervousness until the final vote is known. As such, we expect increased volatility in the days and weeks ahead, especially as other geopolitical events are running in parallel. Silver, platinum and palladium, are generally holding up well, although they too have seen some profit-taking. The strong rebound in palladium suggests strong underlying demand.
Apr 21, 2017 - 9:54 AM GMT by William Adams FastMarkets
Gold and the rest of the precious metals prices are little changed this morning, Friday April 21, with spot gold prices at $1,280.13 per oz. This comes after a mixed performance on Thursday that saw spot gold prices climb 0.2%, silver prices drop 0.7%, while the PGMs were strong with platinum prices up 1.2% to $975 per oz and palladium prices rose 3.5% to $802 per oz.
Base metals prices have managed to generally build on the gains from Thursday with three-month London Metal Exchange prices up an average of 0.4%, this morning.
Lead prices lead the way with a 0.9% rise, while tin prices buck the trend with a 0.5% drop to $19,810 per tonne, while the rest are up between 0.3% for nickel and 0.8% for zinc. Copper prices are up 0.4% at $5,657 per tonne. Volume has been above average with 7,249 lots traded as of 06:42 BST
Sentiment in China has tended to be bearish in recent weeks, but today was an up day across the board with prices up an average of 1.2%, led by a 3% rally in zinc prices. Tin lagged behind with a 0.2% gain, while the rest were up between 0.6% for lead and 1.2% for aluminium. Copper was up 0.9% at 45,860 yuan per tonne. Spot copper prices in Changjiang are up 0.5% at 45,720-45,920 yuan per tonne and the LME/Shanghai copper arb ratio was trading around 8.11. We mentioned in Thursday’s report that there were some reports of some arb trading on Wednesday, so with prices rebounding today some bargain hunting may be materialising.
In other metals in China, September iron ore futures have rebounded strongly with gains of 7.3% on the Dalian Commodity Exchange, while on the Shanghai Futures Exchange, steel rebar prices are up 3.5%, gold prices are little changed and silver prices are off 0.8%. In international markets, spot Brent crude oil prices are little changed at $52.98 per barrel and the yield on the US ten-year treasuries is slightly firmer at 2.24%.
Equities also took on a firmer tone on Thursday with the Euro Stoxx 50 closing up 0.6% and the Dow closed up 0.9% at 20,578. Asia this morning has generally seen follow through buying, with the Nikkei up 1.1%, helped by a weaker yen, the Kospi is up 0.8%, the ASX 200 is up 0.7%, the Hang Seng is up 0.1%, while the CSI 300 bucks the trend with a 0.3% drop.
The dollar index at 99.81 is slightly firmer than this time on Thursday as US Treasury Secretary Steven Mnuchin breathed life back into US president Donald Trump’s reflation trade. This weighed on other currencies with the euro slipping to 1.0713, sterling’s rally has paused at 1.2809 and the yen has eased to 109.37, while firmer iron ore prices has given the Australian dollar, at 0.7534, some strength. In emerging market (EM) currencies, the yuan is flat at 6.8832 and most of the other EM currencies we follow are holding within recent ranges.
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